Personal loan sanctions one to borrow money to finance personal expenses and then return that amount over a period of time. Personal loans are a type of instalment debt that allows you to obtain a lump sum capital. For example, one might use a personal loan to pay for - Moving costs, Debt repayment, Medical bills, Marriage expenses, Home renovations, Funeral expenses, Vacation expenses, Unexpected costs, etc.
These loans are unlike other instalment loans—such as student loans, car loans, and mortgage loans—that are used to fund specific expenses (i.e. education, car purchase, and home purchase)A salary slip is a document delivered by an employer to an employee. It holds a comprehensive account of the employee’s remuneration elements such as house rent allowance (HRA), leave travel allowance (LTA), bonus paid, etc., and withdrawals for a stated period, usually a month.
It could be issued on paper or mailed to the employee. Employers are legally required to give salary slips to their employees periodically, as evidence of salary settlements to employees and withdrawal made.
For the purpose of measuring one’s repayment capabilities, money lenders look into one’s financial profile before sanctioning a loan. Part of this involves checking one’s income and validating it through their salary slips. That being said, it is possible for one to get a personal loan without salary slips, too, especially if one is self-employed. At times the procedure involves exhibiting alternate sources of income and sometimes establishing a rapport with their lender and maintaining a high credit score.
Six recommendations to obtain a Personal Loan without a salary slip are -
Produce an alternative origin of income
If one is self-employed. A freelancer earning in cash or working on a contract; then one can seek a personal loan without a salary slip. In synch a scenario, one needs to show other financial statements to verify their income; it can be in a bank statement, income certificate, form 16, or ITR. A stable source of income reassures the bank of one’s repayments capabilities and helps one obtain a personal loan.
Maintaining a high credit score
When one is self-employed or facing unemployment for a period of time, it is crucial to maintaining a good credit score. This number reflects one’s repayment history, credit handling capabilities, and debt status. It serves as evidence of one’s creditworthiness in front of the money lenders. It indicates the approach adopted by one towards debts. Maintaining a credit score of 750 or above displays creditworthiness.
Offer to pledge an asset as collateral
In the event one lacks the financial strength at present, enquire if the moneylender sanctions asset-backed loans. Good securities such as high-value FDs, mutual funds, or gold gives one something other than just their financial profile. They were offering to pledge an asset as security improves the chances of obtaining a personal loan without a salary slip.
Enlist for the loan with a co-applicant
Signing up for a personal loan with a co-applicant with a high credit score can play a crucial role in obtaining a personal loan without one’s salary slip. This is because it will increase the lender’s trust and confidence in one’s repayments abilities. The co-applicant serves as a secondary source of repayment. Therefore if one fails to make the repayment, the lender can bank on the co-applicant to repay the amount.
Find a moneylender with easy conditions
When trying to obtain a personal loan without a salary slip, it is vital to find a moneylender who maintains simple criteria. This will allow one to get a hassle-free application, verification, and approval. A lender that offers simple eligibility terms on personal loan is Axis bank.
Establish a good relationship with your bank
By being loyal to it for all financial and non-financial services. This helps in maintaining trust with the bank, which then decides one’s loan competence as well as one’s repayment capacity. If one is applying for a personal loan at the same bank, where one’s current account or savings account is located, it becomes easier for the bank to consider them competent for a personal loan. As the bank is fully aware of all the transactions being made on their account, it helps them assess one’s creditworthiness.
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