Personal loans are unsecure loan that is used to cover financial crises like wedding costs or medical bills and home improvement projects, traveling or to make a large purchase. The loan can be granted without any security for a period between one and five years.
The amount of the loan and the interest rate are decided by the lender on the borrower’s qualifications, including their credit scores. Flexible repayment options can be found and can be in the form of a monthly EMI which must be paid on a specified day from the lender.
Due to the need for only a handful of documents, and offering immediate disbursement, this kind of loan has become very popular with millennials.
The ability to get a personal loan with no PAN Card
The PAN card, also referred to as the “permanent account number”, is an alphanumeric code of 10 digits which can be used to keep track of an individual’s financial transactions. It is provided through the Income Tax Department of India to all taxpayers across the nation.
PAN card also functions as an essential document to receive income, purchasing mutual funds, purchasing an insurance policy on life, or even for obtaining an loan. The card is also identification proof which is a crucial document that one must present when applying for loans.
Because of the tax laws as well as the tax laws in India Personal loan lenders have made it compulsory that loan applicants submit the original PAN card in order to get the loan. But, it is possible to get an individual loan without a PAN card if the loan amount is lower than the amount of Rs. 50,000.
This condition is different from lender to bank. However in the event that one has to forfeit from the PAN card during the process of loan request, simply providing the 10-digit code is enough since the lender will assess your eligibility based solely on the number of your card.
The submission of a PAN card is essential in obtaining a loan for personal use because failing to do so could result in the being denied the loan. If, however, you do not have the card then you’ll need to find it by following methods:
- Make sure you have a good credit score: A good credit score is necessary in order to qualify for an individual loan. The score determines an credit eligibility of the applicant and assists lenders make a decision on the merits of your loan application.
- A credit score that is high will allow you to get a rapid approval with a low interest rate, while having a low score could result in loan approval at a high-interest rate , or rejection in the end.
- The score ranges between 300 and 900, and 300 is the most low and 900 being the highest. If you are applying to get a loan for personal use make sure you check the credit score since being rejected due to a low credit score could further reduce the chances of getting an loan from a different bank or lender.
- Make sure you submit your bank statement By submitting your bank statement, it will help lenders keep track of your financial history , based on the basis of which loan approvals are granted.
- The statement provides the lender with an understanding of your monthly credit as well as debits i.e. the current EMIs including bill payments, and your monthly income. If you do not have a PAN account, then you may send a pay slip or bank statement to help lenders determine your creditworthiness.
- Maintain a strong relationship with your bank A good connection with the bank will help to get loans easily without having a PAN card. Request a personal loan with the bank you keep your private bank account or salary with because your bank has a record of your financial transactions and is able to accurately assess your ability to repay.
A few lenders in India offer high-value personal loans that do not require PAN card since the loan is paid out depending on your the amount of your salary, proof of address or other transactions.
Effect on interest rate
A loan that is not secured by a PAN will likely affect the interest rate since the loan is an unsecure nature, which puts the loaner in a huge risk. Personal loans in India is usually offered at an interest rate ranging between 10% and 25%, but the rates differ between lenders and are based on your eligibility requirements i.e. your score on your credit report, income and many other aspects.
Other documents needed to get a personal loan
Other than PAN card, in addition to PAN card, the other documents required for obtaining the personal loan include:
- Identity proofs such as driving license or passport Aadhar card
- Address proofs such as a the utility bills, Aadhar card, driving licence or passport
- Bank statement for the last 3 months.
- Three months’ pay slip
Take out a personal loan through an NBFC or an online lender
For an individual loan that is not secured by a PAN card, apply through the help of an NBFC or online loan lender. The majority of lenders in India employ data-driven algorithms and social scores to evaluate the creditworthiness of loan applicants that permits the obtaining of loans that is not backed by a PAN card.
As compared against traditional bank, NBFCs as well as online lenders are able to meet more flexible requirements for eligibility and strict regulations and rules that don’t make PAN card a requirement to present as an documents of identity or proof of address can be used for loan approval. Additionally, these lenders provide immediate disbursements, which makes them a popular choice within the Indian lending industry.
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