Aadhar card plays a crucial role when applying for a loan in India. It simplifies and expedites the loan application process, making it more accessible and efficient for borrowers.
Firstly, Aadhar card acts as a valid and government-issued identification document. When you apply for a loan, the lender needs to verify your identity to ensure you are who you claim to be. Aadhar card serves as a reliable proof of your identity, reducing the chances of fraudulent applications and making the process more secure.
Secondly, Aadhar-based e-KYC (Know Your Customer) is used by many financial institutions to verify the borrower's details. With e-KYC, the lender can electronically authenticate your personal information directly from the government database. This eliminates the need for extensive paperwork and reduces the time and effort required to verify your identity and address.
Thirdly, using Aadhar-based e-KYC makes the loan approval process faster and more streamlined. The lender can process your application swiftly, leading to quicker loan disbursal if you meet the eligibility criteria.
Furthermore, Aadhar card promotes financial inclusion. Many individuals in India, especially those in rural areas, may not have other valid identification documents like a passport or driving license. Aadhar card, being a unique 12-digit identification number issued to every resident of India, allows a more extensive section of the population to access formal financial services like loans.
It's important to be cautious and responsible while taking a loan, ensuring that you borrow only what you can comfortably repay. It is also essential to note that the specific usage of Aadhar card for loan applications and the required documents may vary depending on the policies and regulations set by different lenders and financial institutions. Always check with the respective lender for their exact requirements and processes.
