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A personal loan helps you get through the immediate financial needs you might have. But the problem that persisted with personal loans was that one had to go through a lot of paperwork and spend a good deal of time before the loan could be sanctioned to him. With the arrival of the PAN card, the situation has radically improved. People can now easily get a PAN card loan by just showing their PAN card and Aadhar Card. It saves a lot of time, and the entire process of getting the loan becomes smooth as well.
What is a PAN Card?
PAN stands for Permanent Account Number. It is a ten-digit alphanumeric number issued with the specific goal of keeping a record of all the transactions an individual does through his different bank accounts. The PAN card gives an individual a unique number that covers up all his bank account numbers.
In a PAN card loan, the PAN card acts as a Know-Your-Customer or KYC mandated by the central banks. This reduces the risk of money laundering.
Uses of PAN card
PAN cards have several uses, and some of these uses serve directly while applying for a personal loan.
Linking a PAN card to your bank account is necessary to avoid TDS deductions on your interest income. Without a PAN card being linked to the bank account, your TDS can be as high as 30% instead of being 10%.
Starting a Business
If you are taking a personal loan for starting up a business, then it is important for you to have a PAN card. According to the Income Tax Act, 1961, a PAN card is necessary for starting a company. The rule was implemented in 2010. A company also needs to provide a Tax Registration Number to the parties concerned, and TRN can only be obtained through a PAN card.
When you buy a new two-wheeler or four-wheeler, then a PAN card becomes necessary. The same goes for getting a car loan to purchase a four-wheeler. But if you are purchasing a second-hand car, then PAN will not be mandatory. A Form 60 can do the job for you.
One of the biggest advantages of using a PAN card is that you can get a PAN card loan through it. In a PAN card loan, you do not have to show all your documents other than your PAN card and Aadhar card. These documents are enough for banks or NBFCs to give you a personal loan.
PAN card makes getting a personal loan much easier.
Benefits of PAN Card Loan
The personal loan that you obtain from a PAN card gives you several benefits. Some of these benefits are as follows:
Paperless Documentation Process
While applying for a loan in a bank, a person has to go through a rigorous process that involves paperwork and verification. The bank checks the credit score, your bank account number, your personal details, and your financial history. Certainly, the process is quite tedious. But with a PAN card loan, things become quite smooth and easy. When you opt for a personal loan through your PAN card, all you have to do is provide your PAN card and Aadhar card. With these two documents, the NBFCs are able to figure out everything about your financial history and whether you are eligible for a loan or not.
There are a few NBFCs that also give you the option of choosing the EMI on your PAN card loan. So, not just the loan amount, with the help of your PAN card, you can also choose the EMI amount and the tenure up to which you want to pay the loan. An important thing to note here is that if your tenure is long, then you will have more interest with low EMIs. But if you opt for a short tenure, then you do not have to pay much interest, but the EMI amount will be higher.
As the documentation process for a personal loan with a PAN card is almost nil, it does not take long for banks and NBFCs to go through the verification process and sanction the loan. Quick approval really helps the people who are in immediate need of funds. The PAN card, therefore, not only helps you in getting a personal loan but does so in a quick manner.
The PAN card loan is a type of unsecured loan where you do not have to place any collateral to get the loan amount. Your PAN card and Aadhar card are the only documents you have to submit without putting any of your valuable assets at risk to get the loan money.
As it is evident, a PAN card plays an essential role to get a personal loan. With the help of it, you can make the entire process of getting a loan hassle-free. So, if you do not have a PAN card already, get one issued immediately.