Easy Ways to Get a Personal Loan Without Documents
5 min read | 5 months ago
Hassle-Free Methods to Obtain a Personal Loan Without Documents
Since its onset in the late 1900s, digital banking has been the key to financial inclusion in India, allowing more people to avail themselves of banking services. This is a fact that can be seen in Mazars' most recently published NBFC (Non-banking Financial Companies) tracker. Mazars noted in its report, based on RBI data, that in NBFCs alone, there has been a significant growth of 33% in Personal Loans. Mazars has attributed this growth to RBI's IT Governance regulations, which have made digital banking secure.
As a result, many borrowers choose a personal loan apply online feature to minimize the hassle of visiting the bank multiple times. Moreover, with RBI mandating KYC in 2004, banks have simplified the loan application process further, allowing them to introduce no-document and minimal-document personal loans.
Emergence Of No-Document Personal Loan Options
The terms no-document and minimal-document personal loans have become increasingly common in India. Most banking customers may have received emails and messages from their bank about applying for a personal loan without any documents. Now, the question is, what are these no-document or minimal-document personal loans?
The term no-document personal loan has two implications. The first is that there is no requirement to submit physical documents. The second implication is that you do not have to submit the basic documents usually required to apply for a personal loan. In most cases, the second implication is the most relevant.
Now, if we look at the emergence of no-document personal loans, it can be attributed to the KYC process. KYC is a mandatory process that banking customers must complete when opening a bank account. Under this process, the bank receives the customer's basic information. Therefore, when borrowers apply for online loans, the Banking or Non-Banking Institution already has the information needed for customer identity verification.
The no-document personal loan is a convenient option for banking customers. However, it is not available to everyone, as assessing a customer's risk rating is a crucial aspect of loan approval. A customer's risk rating is linked to financial behavior, such as past loan repayment, credit score and financial stability. Out of these three, credit score takes precedence in no-document personal loans. Customers with a high credit score ranging from 750 to 900 are categorized as low-risk, allowing banks to offer them pre-approved personal loan offers requiring no documents. If a customer is deemed eligible for a pre-approved personal loan, they can apply for the loan online immediately.
Key Features of No-Document Personal Loans
No-document personal loans are designed to make banking hassle-free and inclusive for borrowers. Borrowers opting for a no-document personal loan apply online feature promotes bank digitalization, benefitting both banks and their customers. Here are the key features of no-document personal loans.
- No-document or Minimal Document Submission: A no-document personal loan is usually a pre-approved loan offer, which means the bank will not require you to submit documents for an eligibility check. Plus, since the bank already has your basic information like KYC, PAN and source of income (in some cases), you do not need to spend time gathering documents for the same.
- Quicker Approval Times: Since most no-document personal loans come with a pre-approved offer, the bank forgoes the usual process of conducting an eligibility check, which can take up to 15 working days. No-document personal loans are approved within a few hours, and the loan is disbursed within 24 hours.
- Assured Loan Amount Estimation: No-document personal loans like pre-approved loan offers come with an exact estimate of your assured loan limit. This estimate guarantees that the applicant can borrow the stated amount without zero chance of loan rejection.
Eligibility Criteria
No-document personal loans have simple eligibility criteria. However, the terms of each criterion are quite specific. Here is a breakdown of the criteria that applicants must meet to apply for a no-document personal loan.
- Credit Score: No-document personal loans are offered mostly to customers with a low-risk rating. The risk rating is determined by their credit score, which gives the bank an idea of the customer's financial behavior. Banks require a minimum credit score of 700 for most personal loans. But, in the case of no-document personal loans, having a credit score higher than 750 is very important.
- KYC: KYC is essential when applying for a no-document loan. So, it is important to check with the bank and update your KYC when required before applying for the loan.
- Relationship with Bank or Non-Banking Institution: Banking and non-banking financial institutions offer no-document loans primarily to existing customers. Therefore, it is important to have an already-established relationship with the Bank or Non-Banking Institution before applying for the loan.
Conclusion
Online loans like no-document loans have made it much easier for people to manage their finances, consolidate debts and even deal with unforeseen emergencies. Moreover, they have encouraged more people to rely on banking services, benefitting both financial and their customers. With the popularization of no-document personal loans, more and more banking customers are opting for personal loans, which is evident from recent data. Furthermore, it is expected that the demand for no-document personal loans will continue to grow in the coming years as well.
FAQs
1. Is it truly possible to apply for a personal loan without any documents?
It is possible to apply for a personal loan without any documents if your bank offers or approves you for a no-document personal loan.
2. How much can I borrow without any documents?
You can check your loan amount eligibility with your bank. Banks usually send a notification about pre-approved personal loan offers, which customers can avail of without providing any documents.
About Unity Small Finance Bank
Unity Small Finance Bank is committed to making banking simpler and more accessible for everyone. Our services include Savings Account, NRI account, Current Account, Fixed Deposits, and Personal Loans offering flexible tenures and attractive interest rates. We also offer financing options like MSME Loans and Microfinance to support businesses and underserved communities. Learn more about Unity Small Finance Bank here.
