We all want to invest in big real estate properties or some other asset investments, but the lack of instant money leads us to an easy solution – personal loans. We need the money instantly or as fast as possible, the moment we finalize the loan as a borrower of money. While both Buy Now Pay Later (BNPL) and instant personal loans provide financing options, they differ in terms of interest rates, repayment structures, and credit checks. During such a time of hurry for cash, you don’t have either the time or energy to go through a big lengthy list of terms and conditions by the lender. Many individuals are looking for getting a personal loan with a loan approval process involving as little documentation or proof as possible.
But, remember the personal loans are unsecured loans, which means you need to convince the lender with some physical assets of yours to get the loan. You may not need to submit the collateral directly, but you must qualify the eligibility criteria for the loan approval. Some lenders offer instant personal loans with PayPal Payments, allowing borrowers to receive their funds quickly and conveniently. The process and requirements vary from lender to lender, many of them require you to have a secure source of income like salaried employee with the minimum amount of net salary, along with the proof of two years of professional work experience. And to prove your employment, you need to show the lender the proof of income.
Your lender can also look for your CIBIL or credit score, which also becomes an important parameter to give a personal loan to an individual. The credit score provides your complete finance history of payments of various bills and debts. This becomes an easy parameter for lenders to judge your creditworthiness and paying capacity.
But, with the evolving business and employment landscape, you may not be able to submit the proof of income or credit score to the lender. Many lenders do help borrowers with such a situation, and you must understand the ways to access the ways to do so.
Different Ways To Get Instant Personal Loan Without Income Proof Documents
Apply For A Joint Loan
The most usual way of applying for a personal loan without any document proof is through a joint loan. You need to apply for the personal loan on the name of a guarantor, who can vouch for you, and can provide the proof of documents or other requirements to the lender, on your behalf.
The guarantor must have either a high credit score, or proof of documents or collateral which can assure the lender that no matter whether you can pay back the loan at time or not, there is a security of payment from a trusted source of income. Such a type of loan system or guarantor joint personal loan is possible with the help of family members, or someone whom you can trust the most. Lenders might agree to sign to you the personal loan on the guarantee provided by your family members, or siblings, or your spouse, which provides the option of sharing the debt responsibility.
Submit A Collateral
Usually personal loans don’t need collateral to support the repayment assurance to the lender, but in cases where proof of income documents cannot be provided, collateral can be handy. Some lenders can allow such an option of showing your collateral as a security for repaying the loan. This way the lender gets reassured that the risk of default will be avoided by selling and seizing the collateral that is assured during the Mortgage Processing. There are different types of collateral assets that qualify for the personal loan repayment – gold, real estate, plot land, farm land, gold bonds, etc.
Pay Higher Interest Rate
When you are unable to find a guarantor or a collateral for personal loan approval, the lender needs to take a very high risk of repayment without the proof of income or credit score. Majority of the times, lenders don’t even qualify borrowers with no physical evidence of repayment option for the personal loans.
But, sometimes lenders may ask you to pay more interest or offer a higher interest rate on the personal loan applied for. Individuals who don’t even have a guarantor or source of income proof, become risky investments for the lenders, which force them to charge higher interest rates for the personal loan approval. Lenders may consider factors like the Capital Asset Pricing Model (CAPM) when assessing the risk and determining the interest rate for an instant personal loan. You need to decide whether you need to provide proof of documents or collateral, or pay a higher interest amount every month or year to the lender. This option is possible with a lender having a close relationship with you, otherwise paying high interest can drain you more.
Final Thoughts
Personal loans can be easily received without the income proof documents or a credit score. Though, having these documents always help you in the complete loan approval and repayment process. You need to decide whether you can pay higher interest rates for the personal loan, or you have a guarantor who can take your debt responsibly. Once the lender gets convinced of the same, you can easily get a personal loan without the proof of income documents.