Personal loans without documents are one of the quickest disbursed loans. Like all loans, personal loans also require some documentation. However, in some cases, banks are ready to grant personal loans without documents or very minimal documents. This depends mainly on the customer credibility & relationship with the bank. Also, bank balance or transaction history especially if a salary account is taken into consideration. It is the reason banks also provide many pre-approved loans.
Understanding Personal Loans Without Documents
Personal loans are unsecured loans that the banks give without any security. It is a loan that does not require collateral, a co-applicant, or a guarantor. Moreover, it is an unconditional loan grant where it can be used for any purpose. It has no specific condition tied to its use. Hence, that is what makes it popular among borrowers. Banks lend personal loans against income proofs. Other than income proofs, other documents like address or identity proofs are required. However, some banks and financial institutions do provide personal loans without documents to select customers.
These are usually those customers who are KYC-approved bank account holders. Through KYC, the bank already has the address proof and id proof. The bank statement and PAN card details exist with the bank. Therefore, they do not need to do much verification about the borrowing customer. Hence, they are ready to lend personal loans without documents. However, other factors like bank-borrower relationships, on-time dues payments, good credit scores, etc. are also strong determinants.
How to Avail of Personal Loans Without Documents
There are many possible ways to avail of personal loans without documents. The digitalization and online process of application and verification help a great deal. Banks nod for instant approvals to customers with good CIBIL scores. To get personal loans without documents, you need to take care of few things as below:
1. Pre-approved Offers
Pre-approved offers are always based on the financial profile of the customer. It is usually a complimentary offer to existing account holders with good bank statements or income history. One can experience almost zero documentation with such pre-approvals. This is exclusive for customers as to what amount and at what ROI they are pre-approved of a loan. Make the best use of such offers to obtain personal loans without documents.
2. Good Credit score
Even if your financial profile qualifies you for a personal loan, a good credit score is important. A high score is one of the deciding factors for lenders, especially when providing personal loans without documents. A credit score is a credit score that evaluates a customer’s creditworthiness. It can be a CIBIL score, Experian score, etc. (by any credit bureau). It assesses if s/he is capable as well as reliable enough to grant loans to. Your credit value falls if you miss your EMIs or make delayed payments. So even if your salary allows you to have instant approvals or pre-approvals, your credit score may disqualify you. Hence, maintain a good score by making payments on time on/before the due dates. A score of 750 is considered to be a good one.
3. Lenders with Instant Approval Feature
Reaching out to lenders with an instant approval feature can help you secure a personal loan without documents. Most of the lending banks and financial institutions have websites/apps to perform quick verification. They can do video KYC verification. They also tie up with fintech to provide personal loans. If not zero, then lenders require fewer documents from you. However, the online process gives you a hassle-free experience and is less time-consuming. You can get a personal loan by uploading a few documents at the ease of your time and place. Therefore, you need not rush to banks to fill and submit forms or be in the queue. You can apply for a personal loan on Paytm to avail of it through just a few clicks.
4. Healthy Relationship with Lending Financial Institution
Banks/financial institutions may grant personal loans without documents to an old or existing customer holding a good reputation. Loyalty goes a long way, especially in the finance world. When one has been a long-time patron, banks rely upon that customer. They have most of your details in their database and have realized and known your credibility over the years. They trust that you will not be an NPA (Non-PerformongAsset) for them. Alternatively, banks will be reluctant if you are a notorious customer. If banks send you several reminders to make due payments, they may not lend again. Even if they agree, they may demand a hefty documentation and verification process.
Note: NPA in banking terms is an abbreviation for Non-Performing Assets. It refers to those people to whom the banks grant loans or make advances who turn defaulters. A loan is a profit-making mechanism for banks. If the debtor fails to meet loan obligation, it is an NPA to the banks.
5. Income to Debt Ratio
Banks always measure the income to debt ratio, especially when granting a personal loan. It is because banks lend it without any security or collateral but based on the source of income. Thereby, it checks if there is an existing loan or EMI to confirm if the borrower can repay the additional loan. If the income to debt ratio is in check, they may grant personal loans without documents. In case you have borrowed from the same bank then they already have your details. If not, then a few information like PAN card, Aadhaar, and credit score can allow you to get personal loans without documents.
6. Clear off/Make Timely Payments of Existing Loans/EMIs
Banks also ensure that the borrower is trustworthy enough and does not turn a defaulter. Making timely payments of loans on due dates builds your creditworthiness. It is a must to remember that it affects your credit score. Banks rely on those records to judge if you will make regular timely payments in the future if they grant a loan. So if your dues are clear or on time, they may not go for thorough documentation. They may lend personal loans without documents or fewer documents. If not, they may deny the loan or approve it after detailed verification of various documents.
Benefits of Personal Loans Without Documents
Personal loans without documents have an additional advantage, that they require no or very few documents. The benefits include:
- First of all, personal loans have no obligations like other loans. You cannot use car loans can to buy/construct/remodel homes and home loans for buying vehicles. However, you can use personal loans for homes, vehicles, education, weddings, travel, etc.
- Personal loans need no collateral, co-applicant, or guarantor. Hence, an individual with a fair income can borrow personal loans without pleading for any security. Salary accounts often have pre-approved offers that individuals can avail of to get personal loans without documents. The income must be at least Rs. 25,000 through salary or owned business. Self-employed people can avail of personal loans as well
- Personal loans come with flexible tenures and rates of interest. These also depend on the salary or business income of the borrowers. Customers can check their eligibility and the amount they can borrow from the lenders through online calculators. They can go for e-application for an easy, quick, and paperless process to borrow personal loans without documents.
Wrapping it up:
Most of the lenders who provide personal loans without documents need only a few details. It includes PAN and Aadhaar details for address and identity verification. Digitalization helps in the process as you can enter the card numbers and lenders can check if it’s authentic. A credit score is almost a prerequisite because it casts the first impression on the prospective lender. It highlights the repaying capacity and the intention of the borrower. Most of the personal loans without documents are granted through digital platforms. These include mobile applications and websites of banks, lending financial institutions, and fintech. For example, Paytm provides complete paperless personal loans.