Aadhaar Card And Business Loan – Understand the Connection Between Them

Nov 17th 2023
Loan
Investkraft

Aadhaar Card And Business Loan, The Aadhaar card is considered among the most crucial documents in the life of an Indian national. It is not just a way to prove one’s identity

You may use your Aadhaar card as proof of residence as well as identification. The Aadhaar card can be useful in a variety of situations:

  • Availing Subsidies
  • Getting an Identity Card
  • Getting a Passport
  • Opening Bank Accounts
  • Paying Provident Funds

However, we shall discuss the relationship between the Aadhaar card and the granting of a business loan in this piece.

What Does an Aadhaar Card Mean?

The Unique Identification Authority of India (UIDAI) issues 12-digit numbers known as Unique Identification Numbers (UINs), or Aadhaar. The number records the person's name, date of birth, gender, address, and other demographic data in addition to biometric data (iris scan and fingerprints).

Other identification documents exist as well, such as passports, PAN cards, driver's licences, etc., but none of them include the same detailed information about the individual as UID cards or Aadhar. Today, the Aadhaar Card serves as a stand-alone form of identity verification that is accepted by banks, financial institutions, telecom providers, real estate firms, government programmes, etc. anywhere identity verification is required.  Additionally, it is required of all nationals to link their voter identity card, PAN card, ration card, Aadhaar or UID card to all of their bank accounts, cellphone numbers, and LPG connections.

Benefits of Aadhaar Card

The benefits that an offers its bearer are various. An Aadhaar card ID is intended to simplify life because it is widely accepted as identification documentation.

Because of its unique number, corruption has also been significantly decreased. The Aadhaar card also has the following additional benefits:

  • Aadhaar card would facilitate the process of obtaining a passport in ten days or less. This is welcome news for anyone who must go overseas. A new law from the government states that obtaining an Aadhaar card is required to apply for a passport. This means that the cardholder can obtain a passport in ten days or fewer.
  • New Bank Account: With the Aadhaar card, opening a new bank account is now more convenient. This one card serves as an identification, residence, and age verification. As a result, other than the card, no other identity verification papers are required. By doing this, the account user may create a bank account without having to gather and submit mountains of paperwork.
  • Voter Card: By connecting a voter card to an Aadhaar card, fraudulent voters are eliminated. It is not feasible for a voter to own more than one voter card after linking both. This is an essential step that must be taken to prevent phoney voters from using fictitious voter ID cards.

The Connection Between Aadhaar Card and Business Loan

Let's now examine the connection between a company loan and an Aadhar card. The lender asks for some documents to confirm your identity and address when you apply for a business loan.

The ideal KYC paperwork in this case may be the business owner's Aadhar number, even if they can provide many papers for the same.

The government of India has mandated that the Aadhaar Card be connected to many forms of identity. This is the rationale for this. Because the UID number can access all information on its own, including voter cards, bank accounts, PAN cards, and mobile numbers, verification using it is therefore simple.

Therefore, the verification and disbursement processes for businessmen applying for personal loans using their Aadhaar cards are quick. As a result, UID Card and quick business loans are directly associated. Furthermore, you only need to gather one document to apply for a loan—a single document might serve several purposes.

Notably, an Aadhaar card can expedite the approval process for a business loan; but, in order to obtain an MSME loan, you will also need to provide documentation of your firm location, a bank statement, an income tax return, and a PAN card number.

The lender also needs additional documentation to complete the loan application, including the business plan, evidence of business ownership, declaration of sole proprietorship, articles of association, and memorandum of associations.

Also Read: How To Start a Small Business in India

FAQs

How Much May a Business Loan Be Used For by My Business?

The conditions of your company, the loan type you select, and the loan duration will all affect how much you may borrow for commercial purposes. After examining your application, Investkraft will assess it and notify you of the authorised amount, tenor, and price for a business loan.

What Happens If My Business is Unable To Promptly Reimburse Me?

The first thing you should do is let us know about your situation if your firm is having trouble repaying the loan. We might work with you to arrange more flexible terms for your monthly repayments.

Why Do Loan Interest Rates Fluctuate?

Since each loan carries a varied level of risk for the lender, they are issued at varying interest rates. Since the lender runs a larger risk of losing money if you are unable to make the repayments on time, an unsecured loan often has a higher interest rate than a secured loan.

The Conclusion

It is advised that you apply for an Aadhaar Card right away if you do not already have one, now that you are aware of the advantages of an Aadhaar personal loan for company owners. If you already have, make sure it is connected to your voter's card, PAN card, bank account, and other pertinent paperwork so you can get a business loan quickly.

Small company owners who want to grow their companies can apply for a fast business loan with Investkraft. Every one of our business loan options is created to optimally meet the demands of entrepreneurs.

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