Loan approval and disbursal depends on various factors, credibility being the most essential. Your payment pattern, repayment plan, background check and your paying capabilities along with your employment and income decide on your loan approval. Your relation with a bank and engagements also contribute equally.
Yes, it is possible to get a personal loan without an ITR but it can vary from bank to bank and also the loan amount plays an important role in offering loan without an ITR. Usually, the loan amount below 5 lakhs doesn’t require an ITR, however, this clause may not be applied universally.
What are the factors considered while offering a loan?
Income – Income is an important factor considered for loan advances. Any lender considers your income to understand your repayment capacity, therefore, takes into account your income.
Loan amount – Loan amount is another factor that helps in your loan amount approval. Higher the amount but the lender find that you are incapable to pay the EMIs would not approve your loan under any situation.
Other debt or ongoing loans – If the lender is already credited enough or have several ongoing loans, there are more chances of rejection.
Which situations can get your loan without an ITR?
- Getting a loan against property is one such situation that doesn’t require an ITR mandatorily since the biggest asset or the property is kept as collateral by the bank therefore, ensuring security for the lender.
- Getting a business loan keeping inventory as security or any giving possession of any other asset to the lender as security can get you loans easily without an ITR.
- A medical emergency can also get you loans ensuring security. Whenever a person is in need due to an emergency or medical emergency, ITR doesn’t hold any importance as far as the lender ensures that the borrower is genuine and not going to default.
What are the documents need to avail a loan?
The usual documents required to avail a loan are as follows:
- PAN card (mandatory)
- ID proof – Passport, Employee ID card, Ration card, voter ID card, driving license, Aadhar (on applicant’s discretion, bank or lender cannot ask)
- Age proof – Birth certificate, 10th certificate, Bank passbook, Driving license, passport
- Address proof – Utility bills (not older than 3 months), Passport, Ration card, Voter ID
- Income proof – Form 16, ITR, Salary slips, Appointment letter, and other supporting documents
- Investment proofs (if any)
Documents requirement vary with the loan type and amount. Secured loans might not give much of an importance to ITR as they already have a collateral equivalent or near to the value of the loan amount.
Every lending institution or organization have different loan requirements with respect to documents. The only prime purpose is to ensure the security of the borrower that the borrower is not going to default the loan and repay the loan completely. There are several ways to ensure safety and security. If the background is clean chit, the bank may not find it difficult to offer loans.