Is it Possible to Get a Personal Loan without a Salary Slip – Truth Revealed!

Personal loans are the simplest source of finance available due to the ease of access, simplified processing and hassle-free documentation. The primary documents required for a personal loan are salary slips, IT returns and form 16. These documents are critical to obtaining a personal loan for unsecured loans, implying that personal loans are for salaried individuals only.

However, in case of the non-salaried, self-employed businessperson, some lenders extend finance without the conventional personal loan documents, provided there are sufficient documents to show the prospective borrower’s creditworthiness.

Here is a list of few documents that will help when you apply for a personal loan despite not having salary slips:

  • Income Tax Returns: When salary slips are not available, nor is Form-16, your income tax returns may be submitted as proof of your income. Generally, lenders look at the last three years’ returns to assess the loan.
  • Alternate source of income: Having an alternate source of income and submitting documents evidencing it, for example, balance sheet, profit & loss statement, bank account statement, rental income, the income of family members, maybe produced to show the serviceability of the proposed loan.
  • Security of collateral: Though personal loans are primarily unsecured loans, individuals unable to produce the mandatory documents may bring in collateral security. In the absence of a salary slip, this allows them to negotiate for a personal loan based on collateral.
  • Getting a joint applicant: Having an earning family member join in on a loan as a co-applicant will add creditworthiness to your application. A steady income will reduce the perceived risk in the proposal, and it will be sanctioned.
  • Existing banking relationship: Much depends on how the existing relationship is with the present bank. Individuals with a credit or deposit relationship with a bank with a proven credit history will attract less stringent norms than others. A good credit score and repayment history will speak for their credit discipline and make up for the absence of salary slips to get the personal loan application approved.

In today’s digital era, banks and lenders assess the eligibility of existing customers based on the information already available to them, for example, length of the banking relationship, account transactions history, credit balance, credit score, income and spending pattern. Individuals who are diligent in making repayments of existing loans, or pay their credit card dues on time, are perceived as credit-wise and low-risk customers. They can even qualify for pre-approved personal loans that can be obtained in just a few clicks. Managing your repayments well, and servicing your obligations timely, will place you higher in the safe-lending matrix for personal loans.

Paying EMIs diligently and maintaining a long-standing relationship will help your loan application sail through the screening process. Go for a lender with a simple process that considers these when granting a personal loan at the best rates.

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