Benefit of PAN Card for Personal Loan Application

Be it a medical emergency, home repair, wedding expenses or short-term financial gaps, a personal loan can provide timely relief and fulfil immediate financial requirements without having to disturb your long-term savings. Besides income proof, bank statements and credit status, PAN is a mandatory document required for a personal loan application. If you don’t already have one, it’s advisable to apply for a PAN card online before initiating your loan application.

A PAN (Permanent Account Number) is more than just a tax document; it acts as a personal identification of the individual that significantly influences their borrowing journey. 

Why is a PAN Card Important for a Personal Loan?

Faster KYC Verification

PAN is one of the most widely accepted identity proofs in India. It simplifies the Know Your Customer (KYC) process during loan application and reduces the chances of delays or loan rejections.

Regulatory Compliance

As per the RBI (Reserve Bank of India) and Income Tax guidelines, high-value transactions exceeding ₹50,000 require PAN verification. It ensures that both lenders and borrowers comply with tax and regulatory guidelines to prevent money laundering.

Credit Score Assessment

PAN provides a clear assessment of your borrowing behaviour. Lenders use PAN details to evaluate your loan and repayment track records, creditworthiness and financial soundness to assess risk of lending before approving a loan. 

A healthy credit score can result in lower interest rates and flexible repayment terms. Allowing you to borrow with confidence, plan your EMI, and reduce the likelihood of financial strain and personal loan penalty. 

Applying for a personal loan today is very straightforward, and your PAN card plays a central role in speeding up the process. 

Here’s a step-by-step guide on how to apply for a personal loan:

Check Your Eligibility

Start by checking your loan eligibility. Most lenders have a general eligibility check where the borrower should be a resident of India, should be above 21 years old, and have a credit score of 750 or above.

Submit Basic Documentation

After eligibility confirmation, you’ll be asked to upload the mandatory documents, such as PAN card, Aadhaar, income proof, salary slips or bank statements.

Receive a Customised Loan Offer

Based on your creditworthiness, income stability, and repayment capacity, the lender will generate a tailored loan offer which specifies the loan amount you can borrow, the interest rate applicable and tenure. A strong credit profile can help you secure better terms that fit your financial needs. 

Loan Disbursal

After final approval, the loan amount is directly credited to your registered bank account, ideally within hours. 

Emergencies rarely come with a warning, but a personal loan can help you meet the financial requirements with ease.