Personal Loans without ITR: everything you have to be aware of

Description:Whether a medical emergency or your child’s higher education costs or for a wedding, personal loan will always come in handy during situations of financial necessity. Although it’s easy to apply for personal loans, certain documents are required for approval. A personal loan that does not include ITR or other essential documents is more at risk of being denied. Check out this article to learn more.

A personal loan, both from the point of application and approval of view, is one of the easiest options to consider in the event of an emergency medical situation or other reasons such as a wedding or vacation, a big celebration and so on. In most cases, you don’t need to notify the bank of your reason for taking out a personal loan.

However, you must be aware that the required income documentation for personal loans for self-employed and salaried people differs. The salaried may be able to get a personal loan on the basis of the bank statements and salary slips and bank statements, an Income Tax Return (ITR) could be required for self-employed persons. Therefore, self-employed individuals can’t get an individual loan without filing an ITR.

Let’s take a look at the ways self-employed people can follow to secure an individual loan with no ITR.

Secured vs. unsecured personal loans requirements

The personal loan can be described as an unsecure loan, which means that you do not need to provide any security or collateral to get it. If, however, you’re an independent business owner looking for a personal loan that doesn’t require ITR, you could choose secured loan.

If a person offers collateral against a loan, the lender could remove the ITR requirement as per the personal loan requirements. Banks aren’t able to lend the total collateral value for loans, but they take the loan-to value (LTV) ratio to calculate the loan amount in accordance with it. As an example, suppose you’ve provided security worth 5 lakhs and the bank is able to offer an 80% LTV ratio. In this scenario the maximum loan that the bank is 4 lakhs.

The process of determining the eligibility requirements in a private loan with no ITR

The importance of credit scores when obtaining an ITR-free Personal Loan

The next step for getting the loan you want without ITR is to establish and maintain a high credit score. Banks look at the CIBIL score that is 750 or above as a satisfactory rating for loans, not just personal loans. Beyond 750, the greater score of the CIBIL score is, the higher the odds of obtaining an individual loan with no ITR.

A better CIBIL score can also help you obtain an individual loan of an amount that is higher and at an interest rate that is lower.

The importance of history of repayment

The lender will go over and above the CIBIL score when they evaluate the loan application. They look over your loan history of repayment. If you’ve been making all of your monthly payments (and punctually) it indicates you have good credit habits and banks are more likely to lend to those with good credit.

IDFC FIRST Personal Loan at the Bank requirements

IDFC FIRST Bank offers personal loans with no ITR, through an easy online application procedure. The rates of interest are competitive and loan terms can be extended to 84 months for salaried individuals. The maximum amount of loan can be as high as 1 Crore.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The information is general in nature and intended for solely informational purposes. It’s not a substitute for advice specific to your specific situation. Information is subject to revision, updating or completion, revision or amendment, and could change significantly. This information does not intend to be distributed or use by anyone in any country where such distribution or use is against the legislation or regulations or expose IDFC FIRST Bank and its affiliated companies to registration or licensing obligations. IDFC FIRST Bank cannot be held accountable for any direct or indirect risk or obligation that the user may incur by making financial decisions that are based on the content and other information provided. Consult your financial advisor prior to you make any investment decision.

The benefits, features and promotions discussed in the article are in effect as of the date of publication on this blog. It is subject to change without prior notice. The information contained in this blog is subject to additional product-specific terms and conditions as well as any conditions and terms, if applicable. Please refer our website www.idfcfirstbank.com for latest updates.