Securing a personal loan requires meeting several basic criteria: a good credit history, a high credit score, and documentation. You will need to provide income proof, your PAN card, Aadhaar card, and salary slips. This documentation is used to assure the lender that you can repay the loan.

Lending institutions now actively use alternative credit assessment tools. This means aspiring borrowers with informal income streams or who are self-employed can still get credit. The key is to present credible proof of your repayment capacity. This write-up is dedicated to helping borrowers who do not have a salary slip get personal loans with manageable EMIs and interest rates.

Focus on using alternative income proofs

Most lenders permit substitute documents when a salary slip is unavailable. This establishes your income stability and repayment capacity. To do this, you should provide documents such as:

1. Bank statements of the last six months, showcasing regular credits and healthy balances.
2. Complete documents of the Income Tax Returns (ITRs) filed for the last two assessment years.
3. Form 16 or employment letter, if applicable in your case.
4. GST return details for business owners, self-employed individuals and freelancers.
5. Rental income details, investment or commission income proofs.

These documents, along with any other similar records requested, help the lender verify your financial behaviour and repayment potential, even without formal payroll records.

Focus on boosting credibility with strong financial indicators

When traditional proof is missing, lenders scrutinise your financial discipline more diligently. Strengthen your credit profile by following these steps:

1. Ensure that you manage a high credit score; any score over 750 is considered reputable.
2. A high credit score is a reflection of a sincere borrower.
3. Maintain a favourable debt-to-income ratio, which is crucial for effective debt management.
4. Ensure stability in employment with a solid job history.
5. In cases of a weak credit profile, borrowers can consider adding a co-applicant to increase their chances of approval and provide additional security.

A clean repayment track record, with no defaults or misses on credit card bills or personal loan EMIs, also improves approval odds for any future credit applications.

Explore lending institutions that provide flexible options with documentation

Prominent digital lenders, NBFCs (Non-Banking Financial Companies), and select private sector banks are often more lenient and open to alternative documentation, provided you meet basic eligibility criteria. These institutions grant personal loans based on factors like your cash flows, credit score, recent default history, bank statement analysis, and credit bureau-based observations.

Aspiring borrowers should always compare personal loan offers, repayment terms, and applicable interest rates before proceeding with any loan. If in doubt, discuss the full loan tenure, amount, associated risks, and repayment duration with a certified financial advisor.

5 common risks of personal loans:

1. They come with high interest rates.
2. Late or missed payments can damage credit scores.
3. Prepayment penalties, late fees, along annual expenses can complicate borrowing.
4. Easy access to funds can lead to overspending and debt accumulation.
5. Threat of legal action in case of missing due dates and defaulting.

In conclusion, borrowers without salary slips can still get competitive personal loan offers by presenting consistent alternative income, meeting basic eligibility criteria, and maintaining responsible credit behaviour.

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Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards, and credit scores. Mint does not promote or encourage taking credit, as it comes with risks such as high interest rates and hidden charges. We advise investors to discuss with certified experts before taking any credit.