Financial experts reveal that your Permanent Account Number (PAN) card can now open the doors to collateral-free personal loans up to 50,000. The PAN card, which has long been viewed solely as proof of tax compliance, is now transforming into a passport for swift access to financing in times of urgency. To ensure smooth processing, you are required to
verify PAN card details as part of the loan application procedure.
Banks and NBFCs Mandate PAN Card for Loans
Leading financial institutions, such as banks and non-banking financial companies (NBFCs), uniformly require PAN cards from personal loan applicants as part of their Know Your Customer (KYC) verification processes.
By running the PAN card details through income tax databases, lenders can pull up applicants' tax and financial transaction records. This allows them to confirm identities, validate income streams, spot suspicious activity, and gauge creditworthiness for loans.
"The PAN card allows us immediate access into an individual's financial history so we can cross-verify applicant details quickly. While the PAN card alone doesn't guarantee approval, its presence enables faster loan processing and disbursal," said the business head of the personal loans department of a private bank.
Other Crucial Documents Needed for Loans
While the PAN card is pivotal, lenders do require additional documents before they sanction loans. Key among them are proofs of income, residence, credit score, and other KYC papers. Only well-packaged applications accompanied by all necessary paperwork stand a strong chance of sailing through unhindered.
However, lenders will typically request IT returns, salary slips, bank statements, utility bills, and other documents alongside PAN cards. Comprehensive paperwork allows accurate applicant assessments.
First-time Borrowers Get Lower Loan Amounts Initially
Industry experts revealed that new borrowers generally initially gain approval for lower personal loan sums. Subsequently, lenders disburse higher amounts as positive repayment track records build up.
"We often approve new clients for just 25,000 or 35,000 initially. Once a healthy credit history falls into place via diligent repayments, we offer pre-approved top-up loans at higher amounts. This helps us mitigate risk," disclosed one of the spokesperson.
PAN Card Mandatory for High-Value Transactions
In addition to income tax compliances, PAN card requirements have been instituted for all high-value financial transactions in recent times. Real estate deals, cash deposits, international payments, and investments into financial instruments above specified thresholds require individuals to furnish PAN details.
The PAN card requirement has made tax evasion and financial fraud far more difficult. It creates an audit trail that promotes financial transparency. Now it is enabling easier access to loans as well.
Obtaining a PAN Card is Simple
Obtaining a PAN card is relatively straightforward for applicants lacking one. PAN cards can be readily applied for online via the Income Tax Department's e-filing portal or through authorised intermediaries. Here are the
steps to apply for a PAN card online:
Step 1: Visit the PAN Card Website
Navigate to Protean's official PAN application page. You will find the link to apply for a new PAN card online.
Step 2: Select Application Type
On the website, choose the application type suitable for you - Indian citizen, foreign citizen etc. Also, select the category that best matches your profile.
Step 3: Fill Application Form
Please carefully complete the PAN card application form. Provide accurate personal information such as your full name, date of birth, complete address, phone number, and more.
Step 4: Upload Documents
You need to submit supporting documents such as proof of identity, proof of address, and a passport-size photo as per the requirements. Upload scanned copies of these documents. Ensure they are clearly readable.
Step 5: Pay Fee
Pay the small PAN card application processing fee online using a credit card, debit card, UPI or Internet banking. This completes your application.
Step 6: Save Acknowledgment
On successful submission, you will get a 15-digit acknowledgement number. Save this number to track the status later.
Step 7: Wait for Processing
The Income Tax Department will verify your documents, and a PAN card will be issued subsequently. It will be delivered to your address within a few weeks.
PAN Cards Set to Become Even More Significant
Industry observers project PAN cards becoming even more integral to future financial transactions, including loan applications. Their interlinking across databases is expected to continue growing in scope.
"As digital connectivity expands, PAN cards are likely to become common identity proofs facilitating instant KYC checks across banking, taxation, investments, and other sectors," said one of the banking analysts.
What if You Don’t Have a PAN Card?
While having a PAN card is essential for most financial transactions, some individuals may not have one. In such cases, they can still apply for loans, but the process may be more complicated. Lenders generally insist on a PAN card for identity verification, so those without one might face delays or higher scrutiny during the application process.
For individuals who don’t yet have a PAN card, applying for one is a relatively straightforward process. PAN cards can be obtained through the official website of the Income Tax Department of India or via authorised agents. The application process typically involves filling out an online form and submitting relevant documents. Once processed, the PAN card will be sent to the applicant’s address.
Conclusion
Armed with a PAN card, Indian citizens can now gain faster access to personal loans during financial crunches. While additional documents are also required, the PAN card enables simplified verifications and rapid approvals.
Initial loan amounts may remain small for first-time borrowers, but diligent repayments can quickly unlock higher funding. As digital integration rises, the significance of PAN cards is set to touch new heights.
FAQs
1. How can I apply for a PAN card if I don't have one?
You can easily apply for a PAN card online through the Income Tax Department's e-filing portal or through Protean eGov Technologies. The process involves filling out a form, submitting documents and paying a small fee. The PAN card will be sent to your address within a few weeks.
2. Can I still get a loan if I don't have a PAN card?
Yes, you can still apply for a loan without a PAN card, but the process may be more complicated. Lenders generally insist on PAN cards for KYC verification, so a lack of it can cause delays or higher scrutiny.
3. Why are PAN cards becoming more important for loans and financial transactions?
PAN cards are being interlinked across various databases, allowing easy access to applicants' financial records. This enables simplified KYC checks, faster verifications, and rapid loan approvals. Their significance is projected to rise further with expanding digital connectivity.
