Are you aware that you could get a business loan with an Aadhaar card? The applicants can now avail of an enterprise loan of up to one crore in the amount of. One crore by using the Aadhaar card in just a matter of hours. Interest rates begin at a low of 1.33 percent per month.
The Aadhar is a unique system of identification that stores particulars such as your name, date of birth, address, and photo, as well as biometric prints in the UIDAI database. It also has links to your PAN number, bank accounts as well as your mobile number. Therefore, the Aadhaar is a valid option for banks as one source for verification in order to prove the authenticity of your identity. Because of this all-in-one feature, which is the Aadhaar card, it is essentially an all-in-one identity verification system., The documentation to apply for loans is very minimal.
Criteria For Applying For A Business Aadhaar Loan
What are the conditions?
- The Aadhaar must be linked to your Permanent Account Number or PAN.
- The Aadhaar must be linked to your bank accounts, both for personal as well as business.
- Your mobile phone must be connected to your Aadhaar number.
- Although not required, It is recommended to connect your Aadhaar number to other identification documents such as voter IDs and ration cards, LPG connection, etc., to ensure that you have an additional source of verification.
Eligibility Criteria For A Business Loan on Aadhaar Card
- monthly business turnover The business’s monthly turnover must be at least Rs. 2,00,000/-
- The age of the business: The business must be operating for a minimum of one year on the day of the registration
- The type of company: Sole proprietorship firms, small-sized individual corporations, as well as private firms involved in manufacturing trading, trading, or offering services may apply for a business aadhaar credit.
- The applicant’s age: A candidate must be over 21 years old and less than 65 years old.
Documents Required For An Aadhaar Business Loan
- PAN card
- Aadhaar card
- Statements of bank accounts for the last six months for all business accounts
- GST registration certificate
- Establishment and shop certificate
Key Benefits of A Business Loan on an Aadhaar Card
Single Point of Verification:
Aadhar card has been linked to other identity documents like the PAN card, as well as various bank accounts. It is the only way to gain access to all information about your PAN Card, bank account mobile number, bank account, and voter ID card. Thus, the verification of this UID is sufficient for lenders.
Reduces loan turnaround time:
Approval, verification, and the disbursement of the loan are quick.
Because the Aadhaar is tied to other document proofs and bank accounts
- The interest part of a business credit is tax-deductible. Based on the tax laws on income that, the interest portion of a business loan is considered an expense of the business, being eligible for a tax deduction. Therefore, when completing the tax returns for your company, the interest you pay on loan repayments must be included (along with other permissible expenses for your business) from the total income. It is important to remember that principal amounts of business loans derived from an Aadhaar card will not be suitable for tax benefits.
- Repayment options based on EMI are eligible to receive tax advantages: EMI-based repayment is eligible for tax only upon clarification. This means that a separate statement by the lender that explains the interest rate is necessary. It is essential to keep a record of your Aadhaar credit card information in order to select an EMI option.
- The interest on all kinds of business loans is tax-deductible: Interest on term loans or working capital and bill discounting, as well as equipment finance and even small business loans, are tax-deductible.
Where Can You Apply For A Business Loan?
While the banks are a secure as well as reliable source of funds, the turnaround time for loans is extremely lengthy. The process of documenting loans is difficult because multiple documents need to be provided, and verification is also a long process.
In this case, it is possible to take out business loans via websites that offer lending services. Finserv platforms such as CreditMantri can help you select from a variety of lenders that meet your needs. CreditMantri is a digital experience with no documentation.
Simple Steps To Apply Online For Business Loans
You are able to apply for a business credit on CreditMantri by following the simple steps.
Step 1: Visit the Business loan category.
Step 2. Choose a loan for a business that is suitable for your requirements by studying the information.
Step 3: After deciding, click “Check Eligibility.” If there is no Check Eligibility, Click on Know More. You will be taken to a page with all the details about the loan. Review the information about the loan before going to the lender’s site to apply.
Step 4 . Enter your details, such as the email ID, city of residence, and date of birth. The current address in years or mobile number, etc.
Step 5:Click Submit.
Step 6. An OTP will then be delivered via your phone.
Step 7. Enter OTP to verify the OTP for confirmation
Step 8. Proceed through the remainder part of the app.
What Are The Factors That Influence Your Aadhaar Business Loan Application?
- A Good Credit Score:
Being able to have a high rating on your credit is a significant aspect. Banks will look at the person’s credit score before approving an enterprise loan. Most the majority of lenders will approve business loans to those with credit scores of more than 720. However, at present, there are private NBFCs that offer small business loans with credit scores that start at 500. Small-scale business owners with lower credit scores usually prefer private NBFCs to traditional lending institutions, such as banks. However, it is recommended to keep a positive credit score since it will ease the process of loan approval. Timely payment of dues, transparency of transactions, and the invoicing of every purchase to dealers are a few of the things that will help you establish an impressive credit score.
Financial status of the company:
The lenders will be looking for steady cash flow as well as sound accounting practices and the amount of reserves in the financial system.
- Loan Amount:
The amount you are seeking to borrow must be in accordance with the financial condition of the company and the reason for which you’re requesting the loan. The high amount could be denied, while smaller amounts may not be able to fulfill the objective of the loan. The loan amount must be matched to the financial requirements, expected benefits, as well as future cash flow forecasts. A loan request that has an amount that is in line with all of these requirements can be easily approved.
- The final goal of the loan
The purpose of the final usage of the loan must be clearly stated since lenders will evaluate your financials and application against this. The amount you are granted is determined based on the purpose of the loan. Make use of the loan for expansion or renovations or for investment that is productive, such as buying cutting-edge technology or promoting your company.
- Business Plan:
A Business plan describes your vision and purpose of the loan, along with other elements. A well-written business plan can aid you in obtaining loan approval.
Business Loan EMI Calculator
Before applying for a business loan, you must decide on the duration of the loan and the amount of your business’s loan. Calculate your EMIs according to the criteria by entering the loan duration as well as the loan amount along with the interest rate into the business loan calculator. The calculator displays the EMI amount immediately. Most lenders are inclined to approve business loans if they have an accurate projection of the amount of loan, duration, and EMIs that are dependent on the current financial condition, growth, and income potential of the company. This is because they will trust that you’ll be able to pay back the loan in time.
Suppose you present your Aadhaar as a KYC document. In that case, multiple verifications are completed with one copy, and this decreases the time between applying for a business loan and the disbursement of your loan. So, getting a company Aadhaar loan is very efficient.