An instant personal loan provides instant cash to support you during times of emergency, education, or family responsibilities. Instant Personal loans are unsecured in nature. That is why earlier a lot of paperwork was required to get approval on a personal loan application. But, with the advancements in technology lenders are able to approve personal loans with minimal documentation. In this article, we are going to discuss 10 ways to get Instant Personal Loan without documents online.
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How to Get a Personal Loan without Documents Online
NBFCs and some private sector banks are willing to grant personal loans without documents based on the relationship with the applicant. If you follow good financial habits that improve your creditworthiness, you can get a document-free personal loan instantly. Below are some of the important things that you should keep in mind if you wish to get an instant personal loan without documents:
Maintain a Strong Credit Score:
Before approving an application for a personal loan or a credit card, lenders check the applicant’s credit history and track record of on-time payments. All types of personal loans will be quickly approved if your credit score is good. Additionally, you will be able to find offers with lower rates of interest, and you can easily take advantage of a reasonable processing charge. Low CIBIL/credit score is a great hurdle in getting your loan approval. To qualify for document-free personal loans, it is therefore advisable to have a strong credit score, ideally greater than 750.
It’s possible to get a loan even if you have a low CIBIL score
Pay All Your Bills On Time
If you use a credit card, you must make sure to pay all bills in full before the due date and to keep your credit card usage below 30%. If you pay your dues on time it will help you in future whenever you are in need of any type of loan. Usually, people think that they won’t need another loan and avoid paying the dues on time. Such an attitude towards repayment can severely affect your credit score, due to which your loan applications may be rejected in the future. Individuals with bad credit scores and repayment histories are not granted loans easily.
Repay all your existing loans and dues on time
You must repay your past loans and all your pending dues on time. This will surely help you in your current application for a paperless personal loan without documents. If you pay your dues and loans on time, it will make you trustworthy in the eyes of the lender. Paying your loan EMIs and credit card bills on time creates a good repayment history which is surely going to help you with your loan application. Delayed payments and defaults on your payments should be avoided at all costs.
Maintain your debt-to-income ratio
A debt-to-income ratio is the percentage of a consumer’s monthly gross income that goes toward paying debts. A debt-to-income ratio of 50% or less is necessary for a quick and easy loan approval process. If your ratio is lower it is an indication that your repayment capacity is excellent, and you have an excellent source of income. As a result, you will become a risk-free and reliable borrower. If you are a risk-free borrower, you will have no trouble getting the loan accepted. Your debt-to-income ratio will be regarded as excellent if it is between 21% and 35%. If your debt-to-income ratio is higher than 60%, it will be difficult for you to get a loan. Keep your debt-to-income ratio in check for an instant personal loan approval.
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Develop a Good Relationship with the Lender
Your chances of getting approved for a quick, no-document personal loan are higher if you apply with a lender with whom you already have a good relationship. For instance, if you already have an account with a bank, you are more likely to be approved for a personal loan without providing any supporting documents.
Take advantage of pre-approved loans
Some lenders may even provide you with pre-approved personal loans up to a specific amount if your credit is strong. No documentation is needed when applying for these loans because they have already been approved.
How to get Personal Loan without a PAN Card
For most personal loans, it is mandatory to submit your PAN along with your loan application. However, some lenders may allow you to avail personal loans of small amounts, i.e. less than ₹50,000, without asking you to submit your PAN card. If one has misplaced his/her PAN card at the time of applying for an instant loan, the PAN card number will suffice.
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How to get Personal Loan without Salary Slips or Income Tax Returns Certificate
A personal loan is an unsecured loan; hence as a proof of income you need to submit your last three months’ salary slips or income tax returns (ITR) certificate along with your loan application. If, suppose for some reason you are not able to submit your salary slips or IT returns certificate you can try one of the following ways to prove your income:
Provide alternate source of income: The applicant for a personal loan may also provide evidence of income from additional businesses, housing rent, bank accounts, income from spouse or parents, etc.
Submit collateral: There is no need to submit collateral while applying for a personal loan because they are generally unsecured. But, if one does not have proof of income, he/she can negotiate with the bank to approve the loan amount by submitting some form of collateral.
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P2P Lending - an Alternative to Banks and NBFCs
Peer-to-Peer Lending (P2P Lending) – There are some lending websites, called P2P Lending websites, that offer loans to people with low CIBIL score. It is an alternative financing method which allows individuals to avail loans from other individuals through online lending platforms. Through these platforms, people who are in need of unsecured personal loans can get in touch with investors who are willing to lend money with the motive of earning a higher rate of interest on their investments. Investors can go through a list of verified borrowers and their details on these P2P lending platforms before they lend money to them. Even though the P2P lending portals are open to anybody who needs money, these mainly attract people of low-income groups or with low CIBIL score or those who have no other alternative to get loans.
Benefits of P2P Lending
- Compared to the interest rates offered by a bank or other financial organizations, borrowers can enjoy lower rates of interest on the P2P lending platforms.
- The process of getting a loan from a P2P lending platform is quite quick and hassle-free. Once you register on the website you will instantly get connected with the lenders present on the platform.
- P2P lending platforms are highly tech-savvy, hence they render services with minimal documentation in a very short period of time.
- The P2P lending system provides loans to individuals who don’t have access to traditional banking systems and also no documents.
P2P lending is also known as crowdfunding or social lending and is increasing its popularity among borrowers and investors in India. India has its own version of the age-old custom of community lending, known as chit funds. They are a pooled form of lending. Chit funds have taken a new digital form in digital chit fund apps and are also a type of peer to peer lending. You can plan the purchase of your favourite and latest mobile phone, TV, laptop on emi without credit card using a chit fund. The interest cost, paperwork and sureties required are much lesser in comparison with a personal loan.
The Money Club is one such online digital chit fund platform which gives us the opportunity of saving and borrowing.
- It provides its users a group of verified members with whom they can pool up money.
- It is a transparent, safe and secure platform that allows like-minded people from all over India to save, invest or borrow efficiently through their smartphones.
- Normal borrowing requires the borrower to fill up long forms and deposit piles of paperwork if he is borrowing from banks. If the user is borrowing from individuals then he has to call or meet a few trusted people before he can convince them about repayments.
- At The Money Club, there is no hassle of paperwork. You can join a club just with a few taps on your phone screen and 2 verification calls from our verification team.
- After joining the club, members who wish to win the pooled amount are required to bid their interest rates for it. The highest bidder wins the pool.
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Comparison of interest rates of a few Banks and NBFCs
|Bank/NBFC Name||Rate of interest||Processing fee||Loan amount||Tenure|
|HDFC Bank||10.75% – 21.50%||Up to 2.50%||Up to Rs.40L||1 – 5 Years|
|IndusInd Bank||11.00% – 16.75%||Up to 3.50%||Up to Rs.5L||Up to 5 Years|
|Tata Capital||11.25% – 14.49%||Up to 2.75%||Up to Rs.20L||1 – 6 Years|
|PaySense||18.00% – 36.00%||2.00% – 3.00%||Rs.1L – Rs.5L||Up to 5 Years|
|Home Credit||13.00% – 30.00%||Zero Processing Fee||Rs.50K – Rs.2L||Up to 4 Years|
|Kotak Mahindra Bank||10.50% – 16.99%||Up to 2.50%||Rs.50K – Rs.25L||1 – 5 Years|
|Citibank||10.50% – 17.99%||0.50% – 3.00%||Up to Rs.30L||1 – 5 Years|
|InCred||18.00%||2.00% – 5.00%||Rs.50K – Rs.7.5L||1 – 4 Years|
|Standard Chartered||11.00% – 15.00%||Min ₹1,000||Rs.1L – Rs.6L||1 – 3 Years|
|Aditya Birla Capital||11.00% – 13.75%||1.00%||Up to Rs.30L||1 – 5 Years|