20000 Loan On Aadhaar Card

Eligibility Criteria to Apply for a Rs. 20000 Loan on Aadhaar Card

The eligibility criteria for these loans is quite simple as shown below. Also, note that the eligibility criteria may vary across lenders.

Documents Required for 20,000 Loan on Aadhaar Card

The main document required for KYC verification in this loan is the Aadhaar card. However, some lenders may request additional documents. These may include income proofs, bank statements, proof of citizenship and other appropriate documents. Paperwork is very minimal for Aadhaar loans.

Things to Remember before applying for an Aadhaar Card Loan

Consider the following factors before applying for a 20,000 loan on Aadhaar

• Compare lenders: Research and compare lenders based on their interest rates, repayment tenures, eligibility criteria, and terms and conditions. Then choose the lender most suited to you.
• Verify your credit score: A credit score determines your loan approval. A high credit score increases the chances of loan sanction. A poor or average credit score may lead to loan rejection. Even if some lenders agree to give you a loan for a poor or average credit score, they may charge you high interest rates. So, try to maintain a good credit score above 650 to get easy loan approval. Again the credit score requirements may vary across lenders.

• Read and understand the Terms: Carefully read and review the loan terms with a major focus on interest rates, fees, and repayment conditions.
• Assess your financial situation: Evaluate your financial situation and confirm whether you can repay the loan on time.

How to Apply for a 20,000 loan on Aadhaar Card

Step 1: Visit the lender’s website or download the app

Step 2: Log into the lender’s app or website using your credentials. You may be asked to enter some basic details like your name, Aadhaar number, mobile number, loan amount, PAN, and duration.

Step 3: Furnish digital copies of all the KYC documents required.

Step 4: Authenticate your mobile number.

Step 5: Verify your salary using salary slips and bank account.

Step 6: After completing your application and uploading your documents, the lender will verify the details and eligibility. Based on your eligibility and creditworthiness, an offer will be given.

Step 7: A confirmation will be sent to you after the loan is sanctioned by the lender.

Step 8: In most cases, once your loan is sanctioned, the loan amount will be credited to your bank account within 24 hours.

How to avoid rejection of a 20,000 loan on Aadhaar Card?

• Improve your credit score: It is very important to have a good credit score for getting a loan on Aadhaar. Lenders often reject applicants who have an inconsistent repayment history with defaults. They are governed by strict RBI directives for lending especially for unsecured loans. Therefore, the first step before applying for a loan is to check your credit score and know where you stand. If your credit score is low, then enhance it. Subscribe to CreditMantri’s Credit Improvement Services and get your credit score back on track
• You should fall within the age bracket set by the lender: People who do not satisfy the age limit set by the lender will not be eligible for a 20,000 loan on Aadhaar. Some lenders have a minimum age requirement of 18 while some others ask for 21. The minimum age thus varies across lenders. However, fulfilling the age criteria alone does not guarantee getting an Aadhaar loan.
• Constraints on residential status: Some lenders may service only in metro cities while some may focus only on tier 2 and tier 3 cities. So location may be a constraint with lenders. Therefore, choose a lender which services the location that you live in.
• Avoid multiple loan applications: Don’t submit multiple loan applications. This may lead to rejection as lenders will think that you are always credit-hungry and may not be able to repay your loan on time.
• You should be able to submit a local address proof: Lenders nowadays ask for local address proof. It could be anything right from an ID issued by the government to an electricity bill. Non-judicial rental agreements are nowadays invalid as address proofs. However, they are still accepted by some lenders along with the Aadhaar card.
• Maintain a low debt-to-income ratio: A high debt-to-income ratio means that your existing debts are more. Lenders may then doubt your repayment ability. On the other hand, a low debt-to-income ratio gives confidence to the lender that you are a financially disciplined borrower. Pay off your existing debts before you take a loan. This will reduce the debt-to-income ratio. Also, read how the debt-to-income ratio will impact your home loan eligibility here.
• Build credit with small ticket credit: In case you are not able to get a 20,000 loan on Aadhaar, get a smaller loan and repay your dues correctly. This will help you acquire a good credit score for bigger loans.
• Ensure to give accurate information: Give correct information for the requested details in the loan form. This includes your personal information, income, and address.

How to Compute the Equated Monthly Installments for a 20,000 Loan on Aadhaar Card?

The EMI can be computed using the formula

EMI = P x R x (1+R)^N / [(1+R)^N-1]

Here P is the principal amount

R is the monthly rate of interest

N is the loan duration in months

Let us take an example. Say Mr. X has taken a loan of 20,000 on Aadhaar at a rate of 10% p.a. and a repayment tenure of 1 year. Then the EMI will be

EMI = 20,000 x 10/1200 x (1 + 10/12*100)^12/[(1 + 10/1200)^12-1]

= 20,000 * 0.008 * (1 + 0.008)^ 12 / [(1 + 0.008)^12 -1]

= Rs. 1755

Manually calculating the EMI is quite cumbersome, so it is ideal to use an EMI calculator.

Note: The values may vary slightly across various online EMI calculators and also when compared to the value obtained from manual calculation.