How to Secure an Easy Personal Loan Without Income Tax Returns
5 min read | 5 months ago
Ways To Secure an Easy Personal Loan Without Income Tax Returns
Is it possible to secure easy personal loans without providing income tax returns? While the salaried class can obtain personal loans with salary slips or Form 16 records, self-employed applicants need income tax returns in most cases. While most banks and financial institutions insist on income proof for self-employed applicants, there are a few avenues that you can still take. Here is a guide to the same in this article.
Provide Alternative Income Sources or Collateral
One way to secure easy personal loans is to provide alternative sources of income or collateral to the bank. Personal loans are unsecured credit, meaning you do not have to provide any collateral or security to avail of funding. Yet, self-employed persons without income proof can choose secured personal loans from financial institutions. If you provide adequate security/collateral for your loan, the lender may not require income proof/income tax returns. The lender will calculate the LTV (loan-to-value) ratio and sanction a specific loan amount. For example, if you offer collateral valued at Rs. 10 lakh and the bank has an LTV ratio of 50%, you can get a maximum loan of Rs. 5 lakh.
If you have alternative income sources, you can use them to obtain personal loans. These include income from any other business/enterprise, interest and investments, property, etc.
Consider Joint Loans or Online Lenders
Several online lenders may offer easy personal loans without the requirement of income tax returns. However, you will have to meet their requirements in terms of age, in-hand income, bank statements, and so on. These portals will also look at your credit score. If you have a CIBIL/Experian score of 750 and above, your chances of obtaining funding will increase. These online lenders are often a godsend for those who cannot furnish their income tax returns.
In some cases, you may also consider applying with a co-applicant. It can be your spouse, parents, or siblings. This individual will share loan repayment with you (the primary borrower), and these loans are known as joint loans. However, lenders will examine the credit scores of both applicants along with their age and income proof.
Explore Peer-To-Peer Lending Platforms
Another way to obtain easy personal loans is to check out available offers on peer-to-peer lending platforms. These platforms help borrowers connect with lenders willing to offer funds at competitive interest rates. This alternative financing method is often a boon for those who cannot take loans from traditional banking channels. You will have to register on a reputed P2P (peer-to-peer) lending platform and complete the formalities. The platform will help you get in touch with registered borrowers accordingly.
Conclusion
In conclusion, it is worth mentioning that securing personal loans is easy nowadays. With the advent of online lenders and quick loans, getting funds for emergencies is never difficult. However, if you are a self-employed borrower who cannot provide income tax returns, there are still solutions that you can explore. Follow the tips above to get funding that covers your immediate or urgent needs without hassles.
FAQs
1. What is the tenure of personal loans?
Personal loan tenures vary across banks and financial institutions. They may be up to 36 months in many cases. Some loans may have slightly longer tenures. Check available tenures across lenders and make a decision accordingly.
2. What is a good credit score for a personal loan?
The minimum credit score required for a personal loan may vary depending upon the bank/financial institution’s policies. Aim to maintain a credit score of 750 and above. It will increase your chances of getting the loan smoothly.
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.
