A Quick Guide to Personal Loan Eligibility Assessment

When you apply for a Personal Loan, lenders assess and verify your identity, income, and creditworthiness before approval. This makes documentation one of the most important factors that determine whether you'll get approved for a Personal Loan or not.
In FY 2025, less than 25% of retail loans, including personal loans, were issued to first-time borrowers. This was because such applicants often lacked stable employment or proper documentation, which led to rejection.
This blog discusses the documents required for a personal loan for both salaried and self-employed individuals, and also the most common mistakes that people make when applying for a personal loan online. Read on to know more!

Why Do Lenders Ask for Documents?

Lenders ask for documents for the following reasons:

●    Identity verification: To ensure the applicants are who they claim to be.
●    Address verification: Helps to ascertain your current place of residence for future correspondence.
●    Income proof: Establishes that the applicant has the repayment capacity to afford the EMIs.
●    Creditworthiness check: Assesses the risk before approving your loan.

Lenders have to follow strict compliance rules. Therefore, full documentation is a mandatory part of the Personal Loan application process.

Basic Documents Required for a Personal Loan

Whether you're a salaried or a self-employed individual, here are some common documents that you always need to submit to increase your chances of approval for a Personal Loan:

Specific Documents Required for Personal Loan for Salaried Persons

If you have a regular job and get a monthly salary, the main concern for the lenders will be your income stability and whether the employer is credible.

Here is a detailed list of documents needed for a Personal Loan application of ₹10 lakh for salaried people at Poonawalla Fincorp.

Documents Required for Personal Loan for Self-Employed Applicants

Lenders generally expect the applicant to have a stable income and demonstrate financial discipline. Self-employed individuals usually face challenges when getting approved for a Personal Loan, as their income is not stable and varies.

Here are some common documents that self-employed people must provide when applying for a loan at Poonawalla Fincorp:

Additional Documents That May Be Required

Personal Loan required documents vary according to your profile and the amount of the loan. In such a case, a lender will ask you to submit:

●    Statement of existing loans: To check how much of your income is being used for loan repayments.
●    Documents related to the guarantor: If you apply with a co-applicant or guarantor.
●    Proof of age: Birth certificate or 10th-grade marksheet if not mentioned in other documents/IDs.

How to Speed Up Your Personal Loan Approval Using the Right Documents?

Submitting documents needed for a Personal Loan application is often the most important and decisive step of a personal loan application. People generally wonder, ‘what are the reasons for a loan approval getting delayed?’

Most of the time, delays in loan approvals are because of the shortcomings of the documents, which may be incomplete, hard to read, or inconsistent. Here are some practical suggestions that will speed up your loan approval:

1. Keep Your KYC Updated
●    If your Aadhaar card or passport has a different address, get it updated before applying.
●    Having up-to-date KYC means that the verification process will involve fewer calls and no requests for submitting documents again.

2. Organise Your Documents in Advance
●    Irrespective of whether you're a salaried person or a self-employed person, you need to prepare all the documents required for the Personal Loan in advance before filling out the application.
●    Ensure that you have both physical and soft copies ready, as many lenders now accept documents uploaded online through DigiLocker and other aggregators.

3. Submit High-Quality Scans or PDFs
●    Do not send blurred photos or cropped images of your ID proofs.
●    For bank statements and salary slips, get the PDF from your bank or company portal and download it. 

4. Match All Details Across Documents
●    Your name, date of birth, and address should be identical across Aadhaar, PAN, and bank statements.
●    Even minor differences (like "Rohit Sharma" vs. "Rohit Kumar Sharma") will delay the approval process as the lender's system will detect it as an inconsistency.

5. Avoid Applying with Multiple Lenders at the Same Time
●    When you submit multiple loan applications, lenders do a hard credit check, which will negatively affect your credit score and slow down the approval process.
●    So, the best way is to first do an online eligibility check and then apply only with lenders that are more likely to approve your application.

Common Mistakes to Avoid When Applying for a Personal Loan

Even if you know about the Personal Loan required documents, there are chances that you might still make mistakes and delay or stop the process halfway. Here are some common mistakes to avoid:

Mistake 1: Using Expired or Outdated Proofs
●    Many applicants attach expired passports or Aadhaar cards with an old address.
●    Outdated documents are invalidated and hence cannot be used for KYC. Therefore, it is better to renew or update your documents 2–3 weeks before starting your loan application.

Mistake 2: Incomplete Bank Statements
●    Applicants may ignorantly submit only a few pages or incomplete bank statements.
●    Lenders need to have access to the full transaction history to confirm the regularity of your income and the spending patterns.
●    Always get the full PDF from the lender’s website or visit the branch and have a printed copy, along with a stamp.

Mistake 4: Salary Slips Without Employer Details
●    Another mistake is submitting a salary slip without the details of the employer.
●    Lenders need to verify whether the company you're working with is legal or not. For this reason, you must get salary slips authorised by the company's HR department with the logo, GST number, and HR contact details added for reliability.

Mistake 5: Missing Signatures on Physical Copies
●    Unsigned copies of documents are usually rejected during online and physical checks.
●    Make sure you always submit self-attested and signed copies of your documents.

What if You Don't Have a Particular Document?

Missing one or two documents doesn’t necessarily lead to rejection. However, if you are facing such a situation, here's what you should do:

●    Provide alternative documents (e.g., a passport as proof of Aadhaar)
●    Prepare an affidavit for missing documents.
●    Apply with a co-applicant with proper documentation.

To Conclude

Documentation is the most crucial factor for your Personal Loan approval. Hence, you should be aware of the documents needed before applying for a Personal Loan. This accelerates your approval process and improves your chances of getting a loan. 

In case of doubt, check directly with your lender, as they usually have a specified list of the documents required for a Personal Loan.

Need a personal loan? Poonawalla Fincorp can help you secure funds with competitive interest rates, flexible repayment options, and hassle-free terms. Apply today for a Personal Loan and take the next step towards your financial goals!

Frequently Asked Questions

Can I apply for a Personal Loan without a PAN card?
Some lenders may allow it if you have other valid KYC documents; however, most require a PAN card for credit checks and tax compliance.

What happens to my Personal Loan application if my proof of address is old?
Outdated address proofs will cause rejection or delay of your Personal Loan application. Therefore, always check and update your address proof before applying.

Do lenders accept digital salary slips?
Yes, digital salary slips are accepted by lenders as long as they are official, clearly show employer details, and are in standard format.

Can I use my office address as address proof?
Generally, no; lenders prefer your residential address. However, providing an office address is acceptable for business loans.

What if my bank statements are from multiple accounts?
You should provide statements for all accounts where income is credited to give lenders a complete picture of your financial condition.