A survey conducted in 2019 stated that 70% of the self-employed people in India did not have income proofs. But when you see the personal loan document requirements and eligibility criteria, you need an income proof to avail the loan. Does this mean that if you are self-employed and do not have an income proof, you cannot apply for a personal loan? No. Financial assistance is open for everyone, and also for people with no income proof. However, the ways to avail of these loans might be different for you.
Read through this article to know more about it.
Make a loan application with a co-borrower
This is the simplest way to avail a self-employed loan if you are self-employed with no income proof. Make a joint application for the loan with your spouse, friend, or any trustworthy relative. Make sure that the person you choose as a co-borrower has a considerably high credit score, i.e. 750 or above and he/she has a stable income as well as income proof for the same. The lenders will add up both of your incomes and get an estimate about the maximum amount that can be sanctioned.
Further, if you have built a good credit history, some of the lenders might also offer you pre-approved loans.
Sign up for a guarantor
A guarantor can be your friend, spouse, or anyone who will be responsible for paying your loan if you fail to do so. You can appoint a guarantor to avail of the personal loan and assure the lender that the loan won’t remain unpaid. However, the guarantor you choose must fulfill all the personal loan eligibility criteria. He/she should also have a higher credit score (equal to or above 750) and a stable income with a proof for the same. This can help you avail a personal loan even without an income certificate.
Presenting income proofs from other sources
Even you don’t have income proof; you can present the proofs of your income that you earn from sources other than your business. This can include the rental income from one of your houses, interest income from your fixed deposits and liquidated assets, income proof of your parents or spouse, etc. If all the incomes that you present add up to the one that meets the lender’s criteria, your chances of availing a self-employed personal loan increase.
Win the trust of your lender
Long-term consistent efforts are necessary to win the trust of your lender. Every financial institution considers giving loans to their already existing customers. Be their consistent customer either with the help of a guarantor or a co-borrower. If you repay the loans successfully, you will eventually build a strong credit history. There are chances that you might get pre-approved loan offers from the lenders too. Apart from these, you also need to hold your savings and current accounts and conduct frequent transactions to prove your credibility to the lender.
Get your facts clear
A self-employed person with no income proof can avail personal loan.
Although personal loan document requirements include a mandatory submission of income proofs, you aren’t deprived of financial assistance if you don’t have one. Co-borrowing is one of the options that make it possible for you to get the loan. Apart from this, you can also appoint a guarantor to get your loan approved. Always remember that the income from alternative sources like liquidated funds and assets can still be presented as income proof in worst-case scenarios.
And finally, the trust that you build among the lenders in the market proves to be your best supporter for availing personal loans with no income certificate.
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