A personal loan is an unsecured debt that can be taken for emergencies as well as for reasons such as education expenses, home improvement, or for making a major purchase. Personal loans are unsecured as there is no collateral required. A personal loan is usually within a short span of one to five years. The repayment options are flexible, and are decided by the lender based on the borrower’s credit history. Loan repayment is done every month via EMIs through post-dated cheques or directing your bank to debit the EMI by ECS (Electronic Clearing Services). Personal loans require fewer documents than other loans.
Few financial institutions consider giving a home loan without documents and income proof, purely based on customer persona and relationship. If you have a good relationship with the bank based on your timely payments and clear credit records, then the bank may offer you a personal loan based on the details already available with the bank.
- Establish a good relationship with your bank by remaining loyal to it for all financial, and non-financial services. This helps in building trust with the bank which then decides your loan eligibility as well as your repayment capacity. If you are applying for a personal loan at the same bank, where your main operating account is located, it becomes easier for the bank to consider you eligible for a personal loan. As the bank is fully aware of all the transactions being made on your account, it helps them assess your creditworthiness.
- Pay all your dues on time with the bank, if you are holding a credit card with the bank. Paying all your credit card bills on time, puts you at a higher chance of availing a personal loan with the bank.
- Do not miss any payments associated with the bank, where you are applying for a personal loan. A missed payment is a sign of incapability of handling finances and therefore, banks, and lenders would ask you to provide a solid proof of income.
- Maintain a high credit score as it helps in building faith with the lender that you are a safe customer.
Banks like Citibank allow you to take personal loans of up to Rs.30 lakh in a span of 48 hours, without any documentation such as income proof, and address proof, provided your residence and office address is updated in the Citibank account. A personal loan, free of documentation, is a dream for most borrowers. With everything going online, from application to approval, documentation merely seems like a time taking step, which may be avoided in some exceptional cases.
How to get a personal loan without PAN card
When applying for a personal loan, as if the per the guidelines set by financial lenders, it is mandatory to submit one’s PAN card as it is mandatory by the tax laws. However, it is possible to get a personal loan without the submission of the PAN card if the personal loan amount is small – anything below Rs.50,000. However, most financial lenders insist on the submission of the PAN card. If one has misplaced his/her PAN card at the time of applying for a personal loan, the PAN card number will suffice.
How to get a personal loan without Salary Account/Slips or Income Tax Returns certificate
If the personal loan applicant does not have regular income proof documents such as salary slips, IT returns, he/she should proof source of alternate income to prove to the lender that the repayment of the loan is possible. Listed below are a few ways applicants can get over this hurdle:
If for some reason submitting the ITR or salary slips is not a possibility, then the personal loan applicant can submit the latest Form 16 as proof.
Though personal loans are generally unsecured, meaning that there is no need to submit collateral, if one does not have proof of income, he/she can negotiate with the bank to disburse the loan amount following the submission of collateral.
If the personal loan applicant has had a long-standing relationship with the bank, either holding a savings or current account with them, or has had borrower with them in the past and has made timely repayments, then the bank will not require income proof documents. In fact, if the personal loan applicant is a pre-approved customer, then he/she will not be required to submit documents and can apply for an instant personal loan.
One can also assign a guarantor when making the application. The guarantor will have to submit proof of his/her income and guarantee the payment of the personal loan if there is any default.