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While getting a business loan, an entrepreneur usually prefers to avail of loan schemes such as SBI business loan schemes, HDFC business loans or government schemes such as Mudra loans. Due to various reasons like longer disbursement time, insufficient approved loan amount, etc., these loans can not be availed. In such cases, there are other options that entrepreneurs can explore. One such option is an Aadhaar card business loan. Many business owners do not know that they can obtain a business loan on their Aadhaar cards. It is a short-term loan that can be used for your day-to-day business needs. Here is more about the Aadhaar Card loan.

What is an Aadhar card loan?

Banks and NBFCs offer a loan on the Aadhaar Card. Such a type of loan required minimal documentation. Data linked to an Aadhaar card enables the lending institution to fasten the verification process. As a result, the loan is processed and disbursed quickly.

An Aadhaar card is linked to a PAN card, bank account, mobile number, and so on. Therefore, it becomes easy for the lending institution to process the loan and disburse quickly.

Features of Aadhaar card loan

  • Quick disbursement: As mentioned earlier, an Aadhaar card loan is processed and disbursed quicker as compared to other business loans. Some banks and NBFCs disburse it even within 24 hours.
  • Collateral free: You do not have to promise any collateral while obtaining an Aadhaar card loan.
  • Minimal paperwork: Aadhaar card loan requires minimal documentation for loan processing. As a result, the borrower has to only produce limited documents such as KYC documents.
  • Suitable for startups: Aadhaar card loans can be obtained by new as well as existing businesses.
  • Repayment period: Aadhar card loan repayment period is usually short and the repayment period is generally 12-36 months.
  • Interest rate: The interest rate on an Aadhaar card business loan is generally 1-2% per month.

Pre-requisites for Aadhar card business loan

A couple of pre-requisites for obtaining an Aadhaar card loan include:

  • Aadhaar card and PAN card have to be linked.
  • Aadhar card and your mobile number have to be linked.
  • An Aadhaar card has to be linked to your bank account.

Eligibility criteria for Aadhaar card loan

Here are the common eligibility criteria for an Aadhaar card loan.

  • A business has to be in operation for more than six months.
  • Every bank and NBFC usually have minimum business turnover as one of the criteria. It differs from lender to lender. For example, IIFL Finance requires a minimum turnover of the business to be ₹90,000.
  • The business should not be on the black list of any bank.
  • Generally, NGOs and charitable trusts are not eligible for Aadhar card business loans.

Note: eligibility criteria depend on the lending institution, hence, it is best to check with the bank or NBFC at the time of applying.

Documents required for the Aadhaar card business loan

  • Duly filled application form
  • Aadhaar card
  • PAN card
  • Bank statement for the last 6-12 months
  • GST registration
  • Proof of business registration

Note: A list of required documents for an Aadhaar card loans may change as per the lending institution. It is best to get a list of documents required from the bank or NBFC.

How to apply for an Aadhaar card loan?

Although not all banks offer Aadhaar card loan, many NBFCs and finserv companies do offer. You can visit the website of the lending institution to confirm if it offers Aadhaar card loan. You can apply for a loan online through the respective lending institution’s website. You can fill in the application form and upload required documents to apply.

Tips to get an Aadhaar card loan

  • Although there is no minimum credit score required for Aadhar card loan, it is best to maintain a higher credit score to increase your chance of loan approval. A credit score of 700+ is considered to be a decent score for obtaining any loan.
  • You can prepare a project report for a loan. Usually, one does not require a project report for an Aadhaar card loan. However, it is best to have it handy if the lending institution asks.
  • If you are applying for a loan online, beware of business loan scams. Check the credibility of the lender before applying.

Concluding remarks

In a nutshell. If you require a small amount urgently, an Aadhaar card loan suits you the best. However, if you have planned expenses and need a larger sum, you can visit the nearest bank or obtain a business loan from Tata nexarc.

Also read about:

PSB Loans

Business Loan

Mudra loans

Frequently asked questions

What is the loan amount of Aadhaar card loan?

The loan amount differs according to the lending institution. Generally, you can get a business loan of up to ₹50 lakh on your Aadhaar card, depending on your requirement eligibility and other criteria.

What is the rate of interest for Aadhaar card loan?

The rate of interest depends on the lending institution. Usually, the rate of interest for Aadhaar card loan is 1-2% per month.

How quickly the Aadhaar card loan is approved?

Aadhaar card loan is generally approved quickly, and the processing time required is lesser. The loan can be approved and disbursed as quickly as 24 hours, depending on the documents submission and lender’s processing time.

Swati Deshpande

Swati is a passionate content writer with 6 years of experience crafting content for the business and manufacturing sectors, and helping MSMEs (Micro, Small and Medium Enterprises) navigate complexities in steel procurement, and business services. Her clear and informative writing empowers MSMEs to make informed decisions and thrive in the competitive landscape.