What is Aadhar card? This is a special type of identification code given to Indian citizens. This card is only for identification purposes but not for a proof of citizenship. Aadhaar card contains the persons demographic data, iris scan and fingerprints. These cards are suitable when taking personal loans. Aadhaar card is not a substitute of other identification documents but it can be used as one since it has all personal details.
Applying loans using Aadhar card can make the process simple because the information it has can be used to secure the loan. however, there are pros and cons of using Aadhar card to secure loan.
How to Apply for Aadhaar Card Loan
Aadhar cards have become popular in India and more people are registering to acquire them. It has become easier to acquire any loan using Aadhaar card because it minimizes the amount of personal document required. Most lenders have accepted the use of these cards to secure the loan.
The following are steps ton how to acquire loan using your Aadhaar card.
Step 1: search for your best lender by comparing their offers in websites
Step 2: sign in to the website of your prospective lender.
Step 3: starting filling the details in the online application form.
Step 4: add you scanned Aadhaar card on the part where you attach files.
Step 4: submit the application.
Once the lender receives your application, they will start to verify your document to help them approve your loan request.
If you are using manual bank system, you will have to attach a copy of Aadhaar card with other required documents by including Aadhaar card in your application, it makes the application easier and faster.
Pros Of Using Aadhar Card Loan
When a person uses Aadhar card to secure a loan, the process becomes easier and simplified.
Here are the benefits of using Aadhar card loan:
- The Loan Process is Shortened
When you need money urgently, you can use Aadhaar card to secure the loan.it makes the whole process easier and simple. The moment you give your lender the card, there will less document required to approve your loan. this is so because other card contains enough private information to secure a loan.
- Minimal Documentation
Most financial institutions in India allows people to use Aadhar card to borrow loan. when you provide your Aadhaar card, your loan will be instantly verified and approved. The next few minutes you will receive the money in your account. For those who do not like paperwork, you can use your Aadhaar account to secure your loan.
- Easy to Qualify
When you possess Aadhaar card, you can qualify for personal loan than the person who doesn’t. using Aadhaar card to secure a loan is optional but when you do it is considered as a collateral. However, before you acquire the loan using Aadhaar cards do some research to understands the privacy policy of the lender. Some companies do pay much attention to their client’s personal information.
- Favorable Interest Rate
Interest rates crucial when borrowing loans. nobody likes high interest rates. Did you know that Aadhaar card can reduce your loan interest? Most lender consider Aadhaar card as a loan collateral, therefore they will reduce you loan interest rate. Although, this criterion will vary from on lender to another.
- Convenient EMI Options
You can now enjoy flexible EMI option when you use you Aadhaar card for loans. you get to choose you loan tenure and monthly installment
Cons of Using Aadhaar Card for Loan
With all the benefits of the Aadhaar card loans, there are still some cons that may limit the user from using it to secure the loan. the following are the cons of Aadhaar card loans:
- Your Personal Information Can Be Stolen
Aadhar card contain high value personal data and whenever you apply for a personal loan on Aadhar Card there may have chances to leak your personal information. If this information gets to malicious people, it can compromise your privacy. With current technology, most people secure their private documents with fingerprints. If information about your fingerprint gets accessed, your security is destroyed.
- Fake Duplicates
People information can be priceless. Possessing high value information can raise a lot of alarm due to possibility of security breach. The fact that you have Aadhar card doesn’t mean you are the owner. This breach creates an opportunity for people to duplicates high value information for illegal purposes.
- Security Breaches
Due to the vulnerability of Aadhar data, there is high chances of security breaches for some individuals. People pay lump sum to get other people personal details. Not all people can withhold the privacy policy, some breaks it for money. moreover, when data get to the third party the security cannot be guaranteed.
Things to Keep in Mind Before Using Aadhaar Card Loan:
Research on lenders: before you go ahead to trust lender with your Aadhaar card, do some research understand the privacy policy. Also inquire about the loan interest and any other fee payable. Above all pick the lender who has competitive offers.
Read the loan terms well: reading lenders terms and condition is essential. Some lenders include additional chances on the policy documents. it will help you avoid unnecessary surprises in future. You also want to ensure that you Aadhaar data are secure.
Charges and penalties: before using your Aadhaar card to secure your loan ensure that you read understand the charges and penalties and where they are applicable.
Conclusion
It is simple and fast to apply loan using Aadhaar card. Whether you are using online platforms or manual banking system, using Aadhaar card will help you simplify the whole process. However, one should be cautious of the risk. Aadhar cards contains valuable information which can cause mass surveillance when it gets to malicious people. otherwise Aadhaar card should be private.
