A personal loan is an unsecured credit option wherein you do not require providing any collateral or security. Owing to this specific reason, lenders tend to look at other aspects of your profile to understand if you are eligible for personal loan application approval. One of the major factors is your income source, which is authenticated by reviewing your salary slips. While salaried classes typically get monthly income slips, the same is not possible in the case of self-employed classes? In case you belong to the self-employed category, continue to read on to learn how to avail a personal loan with a salary slip.
How to avail of a personal loan without a salary slip?
Here are 6 crucial ways to avail a personal loan without a salary slip:
Provide an alternative income proof
Being a self-employed person, you typically work on a contract basis and may not avail of any monthly income slips. However, you still can show your income proof as a document. For this, you must fetch your financial documents, such as your bank statement, form 16 and income tax returns (ITR). Such documents can assist validate your earnings and guarantee lenders that you hold the potential to repay the borrowed loan amount.
Maintain a good credit score
Besides your income sources, lenders even consider your past credit history to decide your credibility and your credit repayment behaviour. Thus, no matter whether you are self-employed or currently lost employment, try and keep your score on the higher end. If your credit score is high, i.e., over 750, then lenders may feel comfortable in sanctioning your loan and stay assured that you will timely repay the loan EMIs. Ideally, a score of 750 and above is looked upon as good and can assist you in simply availing of financial assistance with ease.
Pledge assets as collateral or security
The next alternative to avail of a personal loan with no salary slip is to see if the lender allows asset-backed or secured credit options. You can pledge securities or assets such as high-value mutual fund units, fixed deposits, gold jewellery or anything that can show your repayment potential. Pledging an asset or security, in most cases, may provide you with a personal loan without any requisite salary-based document and at a lower rate of interest.
Applying for a personal loan jointly with a credible family member as a co-seeker or co-applicant can assist you in getting the personal loan without any salary slip. Co-applicant can offer the necessary income documents with an excellent credit score, which may, in turn, enhance the confidence of the lender when sanctioning a personal loan. In this way, you can avail the personal loan you require to meet your monetary shortfall, mismatches, or financial emergencies.
Simple eligibility parameter
To avail of a personal loan with no salary slips and no income document, you can directly approach the lender who wants you to meet basic personal loan eligibility parameters. Financial institutions with minimal eligibility parameters are more likely to accept your personal loan application even if you do not offer salary slips. Most of these lenders usually offer these personal loans online with a simple application process and hassle-free and simple documentation process. There are specific instant loan apps also that allow you to avail a personal loan without the need to provide any income slip. The best instant loan apps without salary slip requirements are MoneyTap Loan, PaySense Loan, Nira, Kissht, Dhani Card, Smart Coin, MPokket Loan, Cashe, Home Credit & Money View.
Good banking relationship
If you have formed a good banking relationship with the bank, you may not require providing any documents when placing an application for a personal loan. A strong banking relationship is formed if you already hold an account in the form of current or savings with the bank. Such relationships may also be in the form of fixed deposits, recurring deposits, or credit card accounts. Having such strong relationships with banks may omit the need to provide any income proof document for the processing of a personal loan.
Final key takeaways:
∙ Lenders need income proof to approve unsecured loans such as personal loans.
∙ Self-employed categories do not get any regular income slips.
∙ Offering an alternate income document such as ITR and bank statements can assist you in availing personal loan without any salary slip.
∙ Maintain a good credit score to avail faster personal loan approval.
∙ Placing a personal loan application jointly with a credible co-applicant helps with the loan approval.
A personal loan is often unsecured in nature that permits you to cover many kinds of expenditures. It does not need any security and can be disbursed quickly. However, due to lack of security, lenders may ask for income proof or salary slips to justify your potential to repay.
The great news is you simply can leverage your complete salary power to avail a good credit line. This feature, though, is not a problem for the salaried classes; for the self-employed, it might be problematic. The above-listed ways can help the self-employed avail of personal loans easily. It can also help the salaried classes too if they earn a lower income.
What are the documents required for processing your personal loan apart from the salary slip?
∙ Identity proof
∙ Residence proof
∙ PAN card
∙ Current 3 months bank statement for the salaried while self-employed must produce past 6 months bank statement
∙ Passport size photos
∙ Office proof to show your ownership and business continuity in the case of self-employed
Remember, before you place an application for a personal loan with no salary proof or income proof, it is extremely crucial for you to check your personal loan eligibility criteria, loan processing fees, monthly EMIs, and your credit score. Also, ensure to compare amongst different lenders to select the one offering the lowest interest rate and charges and maximum benefits. Once you have selected the lender, use the online personal loan EMI calculator to compute the personal loan EMI and overall interest cost as per your repayment capacity. Doing so will also help you to figure out a suitable repayment tenure.