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Applying for a personal loan in India is very easy, thanks to relaxed laws and simpler personal loan eligibility criteria. However, despite all the ease and quicker processes, you still need to have the correct set of documents when you apply for a personal loan on KYC.
The required set of personal loan documents needed by a bank or NBFCs can differ, but you will find that all of them will ask you to perform an e-KYC (if you are applying for an instant personal loan online). In this blog, we will help explain what an e-KYC is and how you can successfully provide all the KYC-related documents to get your personal loan application approved quickly.
What is e-KYC?
e-KYC is the electronic process of verifying the identity of a customer digitally. This method eliminates the need for physical documentation and in-person verification, making the process faster and more convenient. To complete your e-KYC loan in India, you will have to provide your Aadhaar card number, to authenticate and verify your identity.
Read more: Get a personal loan without security
How Does the e-KYC Process Work?
The e-KYC process involves the following steps:
1. The customer provides consent
The process begins with obtaining the customer’s consent for KYC of loan. This is crucial as it ensures that the customer agrees to share their Aadhaar details for verification purposes.
2. Proceeds with Aadhaar authentication
Once consent is obtained, the customer’s Aadhaar number is used to fetch their identity details from the UIDAI database. This can be done through an OTP-based (One-Time Password) authentication and biometric data (fingerprint).
3. The data is fetched
Upon successful authentication, the customer’s demographic details (such as name, address, date of birth, and gender) and photograph are retrieved from the Aadhaar database.
4. Verification and onboarding
The retrieved data is then cross-verified with the information provided by the customer during the loan application. If the KYC loan details match, the customer is successfully onboarded, and the loan application is approved.
Read more: How to choose the best personal loan lender?
What are the Benefits of Going Through e-KYC?
Here is why the e-KYC process is so much better than the regular way to get a personal loan:
e-KYC is faster and offers convenience
One of the most significant advantages of KYC loan is the speed at which the verification process is completed. Traditional KYC methods can take days or even weeks, whereas KYC for loan can be done in a matter of minutes. This is particularly beneficial for personal loan applicants who often require funds urgently.
e-KYC is paperless
e-KYC eliminates the need for physical documents, reducing the hassle of paperwork. This not only speeds up the process but also reduces the risk of document loss or damage.
e-KYC is cost-effective
For financial institutions, e-KYC reduces the costs associated with handling, storing, and verifying physical documents. These savings can now be passed on to customers in the form of lower processing fees.
Greater security
It is considered more secure than traditional methods as it makes use of both biometric data and secure OTPs for authentication. This reduces the risk of identity fraud and ensures that the verification process is tamper-proof.
e-KYC also promotes inclusivity
It enables financial institutions to reach a broader customer base, including those in remote areas where physical verification may be challenging. This supports financial inclusion by providing access to credit for underserved populations.
Read more: What are instalment loans? – Types, process & more
What are the Guidelines on How e-KYC can be Implemented?
The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have laid down clear guidelines for the implementation of e-KYC. These regulations ensure that the process is conducted in a secure and standardised manner, protecting the interests of both customers and financial institutions.
Aadhaar based e-KYC
The RBI has permitted the use of Aadhaar-based e-KYC for customer identification, provided that the customer voluntarily submits their Aadhaar details. This method is widely used for quick and efficient verification.
Video KYC
In addition to Aadhaar-based e-KYC, the RBI has also introduced Video-based Customer Identification Process (V-CIP). This allows customers to complete the KYC process through a video call with a bank representative, providing an additional layer of convenience and security.
e-KYC has been a welcome change in the way India gets access to loans. Thanks to its secure and instant verification process, getting personal loans has now become much faster than before. Apply for your personal loan on KYC today, complete the e-KYC and make sure to repay your EMIs on time to avoid any extra charges!
FAQs
What is e-KYC verification?
e-KYC (Electronic Know Your Customer) is an online process that verifies a customer’s identity using digital documents, typically through Aadhaar-based authentication. It simplifies the process of KYC for loans and other financial services.
How is e-KYC different from regular KYC?
e-KYC is a digital process that eliminates the need for physical documentation, whereas regular KYC requires manual submission of identity and address proof. e-KYC is quicker and more convenient, with instant verification.
What documents are needed for e-KYC verification?
For e-KYC, you typically need an Aadhaar number linked to a mobile number, PAN card, and sometimes other digital identification documents like a voter ID or passport.
Who is eligible for e-KYC verification?
Anyone with a valid Aadhaar card and a mobile number linked to it is eligible for e-KYC verification. The process is generally available to Indian residents seeking KYC loans or other financial products.
How does e-KYC benefit loan applicants?
e-KYC speeds up the loan application process by providing instant identity verification. It reduces paperwork, making it easier and faster for customers to complete the KYC requirements for loans.
