Is it safe to provide the lending firm with your account number, IFSC code, and other financial information? The majority of individuals are wary when personal loan applications or websites for rapid loans need bank information in order to execute their loan application.

What can you do to be sure sharing your bank information is secure? Your personal information is probably safe provided you are aware of the purpose for the request and the website or app making the request is a reputable loan provider.

You can take precautions to make sure your information is secure and that you are exchanging your bank information with a legitimate loan provider, though.

Find out how your Data is used

Why does a Lender require particular Documents?

In order to process a personal loan application, the borrower must provide personal information and supporting documentation. Without these, the lender cannot assess the risk of giving a personal loan to the applicant. Depending on the lender and borrower, different documents may be required. To execute a loan application, every lender will, however, undoubtedly need a few standard ones.

The documentation that most lenders will need are shown here, along with the justifications for such requests.

1. Identity-Related Paperwork

These papers include address verification, a PAN card, and an Aadhar card. These are necessary to establish the borrower’s identification completely as well as to ascertain his identify and place of residence. These records are also referred to as KYC paperwork, which stands for “Know Your Customer,” as the name implies.

2. Proof of Income

In order to confirm that you are receiving a consistent and stable monthly income, the lender may request your most recent pay stub(s). The lender can also ask you for prior employers’ pay stubs if you just changed jobs. This will also aid the lender in deciding if you qualify for a personal loan.

If you own your own firm or work as a self-employed professional, you won’t have pay stubs to show for your earnings. When this occurs, the lender will request an ITR in order to determine your typical monthly income. Additionally, an ITR will assist in providing a clearer picture of your income if you have any extra sources of income, such as rent earned or revenue from a side hustle.

These papers are frequently needed by lenders to prove a borrower’s creditworthiness. In order to expedite the personal loan procedure, you must make sure that you give the lender enough documents and definitely legitimate ones to support your claim that you are in urgent need of a loan.

3. Account Statements

The lender will want your last three to six months’ worth of bank statements when you apply for a personal loan. The lender will need access to your bank statements in order to comprehend your cash flow and financial situation. Finding your debt to income ratio, also known as understanding whether you have any outstanding debts and how much money goes toward them, is also helpful. The lender will consider your income when determining how much and for how long you can borrow money. The lender may occasionally request credit card statements in order to determine your spending patterns and the manner in which you handle these debt instruments.

What types of Information do Banks collect and why?

In order to conduct routine business operations and to promote goods and services, banks and credit unions gather and utilise a variety of different forms of personal information. Banks may use the data they gather to generate bank statements, keep an eye out for fraud, and assess creditworthiness.

Additionally, banks and credit unions compile data on customers’ internet behaviour. Although this data may not be used to specifically identify a person, it can still be used for marketing. For instance, when customers use mobile or online services or visit a financial institution’s website, banks and credit unions may compile data on their network address, type of computer or mobile device, and social media and surfing habits. According to our analysis, banks mostly utilise this information to maintain the functionality of their websites, spot and stop fraud, and customise marketing.

Do they have permission to disclose your Information?

I’ll say it again: yeah. However, in order to secure the personal information they gather, use, and share with third parties, banks and credit unions must also have procedures in place. Additionally, in some circumstances, consumers can choose not to have their information shared. The Gramm-Leach-Bliley Act of 1999 is the main piece of legislation that controls how financial companies can use or disclose personal data about customers. This rule forbids financial institutions from giving nonpublic personal information about consumers, such as their Social Security number, income, and outstanding debt, to businesses that are not affiliated with them. Customers have the option to refuse to provide some but not all of their personal information.

Thing to keep on Mind while choosing the Lender


Email is undoubtedly a secure way to provide papers to a lender if they want them. Simply make sure the email address the lender gave is one that is registered in the name of the organisation. As a result, while sharing your papers, you must pay attention to the email domain.

The Personal Loan App

In order for a borrower to complete the whole personal loan application process online, lenders frequently create personal loan applications that include functionality for document uploading. It is definitely safe to upload all the documents on the personal loan app if the lender you select is approved. In the same way, applying for a personal loan online through the lender’s website is secure.

Email or Telephone

You must resist the urge to send the papers to others via messages if someone approaches you via a messaging service like WhatsApp. Due of the sender’s anonymity, sending critical documents through message or phone is the least recommended method. However, lenders that are formally registered on a platform may create simple customer journeys on a messaging network like WhatsApp for the benefit of customers.

How to keep your Papers and Personal Information Safe

Borrowers should use utmost caution when disclosing personal information or documents online.

1. The Lending Institution’s Reputation

Borrowers should confirm that the lender they have contacted is reliable and has received approval from the RBI before submitting an online personal loan application with that particular lender. Along with that, it’s crucial to spend some time on the website or app since such things—along with the lender’s social media accounts—can be used to verify their legitimacy and authenticity.

2. A Channel of Communication

Using a private and secure communication channel, borrowers should exchange their private and critical papers. Further safeguards include the ability to password-protect papers, ensuring that only the lender has access to them and preventing any unauthorised use of data or documents.

3. Review the Fine Print

The terms and conditions on the website/app must be carefully read by borrowers in order to safeguard data and documents, avoid future hidden fees, and protect themselves. The terms and conditions, privacy statement, and other information will be clearly outlined on a legitimate lender’s website or mobile application.

4. Check Online Reviews

It is advisable to read app evaluations on the play store, the app store, or even on Quora where borrowers may verify the comments offered by previous/existing borrowers in order to avoid falling victim to illegal lending applications and exchanging personal documents and data with them. In this way, customers may be very certain about the lender they choose.

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