How can I take out a personal loan without proof of income?


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I am a student. I want to take a loan from ??2 lakh to join a coaching program. I plan to repay the loan after I find a job. Can I get a loan only in my name because I want to personally bear the burden and not pass it on to my parents. However, the problem is that the bank asks me for my payslips for the last three months, which I don’t have. Should I opt for a loan through a digital loan app instead? Are they safe? Do they have any hidden fees or processing fees? Can taking such a loan affect my Cibil score?

—Pelu Upadhyay

A loan from any bank will require you to provide proof of income (how are you going to pay off the debt, that’s what the bank wants to know), collateral (in the event of default on the loan , the bank must protect its capital), guarantor (a back-up that the bank will request in the event of default and from which it can recover its outstanding capital).

All these checks the bank will follow to ensure its security. At the same time, the new players offer a more flexible approach. But all will also ensure that the checks and balances are in place to ensure the security of their capital.

And for this, the basic documents required to obtain a loan will be the PAN card (permanent account number), the Aadhar card, active bank details and proof of income.

In your case, since there is no proof of income, you will need to provide some form of collateral. It is advisable to make your parents a co-borrower and they are jointly responsible.

And if the loans are paid on time, it doesn’t negatively affect your credit score.

I am about to start a business at the age of 40. I have a capital of ??30 lakh as personal savings and I also have angel funding. I want to invest around ??10-15 lakh. My wife has a regular income and we own a house. How should I plan to start my startup?

—Name hidden on request

As your startup requires ??10-15 lakh and you have the funds available from your own sources, it is safe if you use your own funds to invest in the startup.

You have the advantage of having a secondary source of income since your spouse has a regular income and you have your own home.

The excess funds that you have on top of the start-up fund can then be invested partly in banks or liquid funds and partly for long-term investments.

Surya Bhatia is Managing Partner of Asset Managers.

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