How to Get a Personal Loan Without an ITR: Complete Guide

Need a personal loan but don’t have an Income Tax Return (ITR)? Don’t worry! Whether you’re a freelancer, on a break, running a small business, or don’t have a fixed salary, you can still secure a personal loan. Many lenders offer flexible, hassle-free loan options with quick approval processes.
Our guide will show you how to navigate the process of getting a personal loan without an ITR, and highlight alternative documents that can enhance your chances of approval.
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ToggleWhat are personal loans without ITR?
Personal loans without ITR do not require Income Tax Returns (ITR) as part of the application process. Instead, these loans are offered based on other factors like your credit score, bank statements, salary slips, and overall financial stability.
Lenders, especially non-banking financial companies (NBFCs) and fintech platforms offer such loans to individuals who may not have filed their taxes but can still demonstrate a steady income and a good repayment history. However, these loans usually come with higher interest rates and lower amounts compared to traditional loans that require ITR submission.
Is it Possible to Secure a Personal Loan Without ITR?
Yes, it is possible to avail a personal loan without ITR. Typically, an ITR is needed if you apply for a large loan amount. If you are applying for a small loan amount, you can provide other documents to avail loan.
Alternative Documents: The lender may ask for bank statements, salary slips or employment details to understand your income source.
Co-applicant or Guarantor: If you apply with a co-applicant who has a strong credit profile, you can improve your chances of loan approval.
Higher Interest Rates: Some lenders may still offer loans at high interest rates in the absence of proof of a stable income source.
Many lenders do understand that not everyone would file an ITR due to varied reasons like being self-employed, freelancer or earning below tax exemption tab. Thus, if you fall in this category, you can still get a personal loan without ITR. You can provide alternative income source proof like invoices, bank statements, or invoices. However, be aware that the lender may offer loan at strict terms to mitigate their risk.
Scenarios Where Applicants May Not Have an ITR
Individuals may not file an Income Tax Return (ITR) in India due to various reasons, including:
- Income Below Taxable Limit: Individuals whose total income is below the exemption limit are not required to file an ITR.
- Non-Resident Indians (NRIs): NRIs who do not have any income source within India are generally exempt from mandatory ITR filing.
- Agricultural Income: Income derived from agricultural activities is exempt from income tax under Indian law. Individuals who earn solely from agriculture are not obligated to file an ITR.
- Individuals on Career Breaks or Unemployed: People on a career break or unemployed may not need to file an ITR if they don’t have any taxable income.
- Students or Fresh Graduates: Individuals who are still studying or have recently graduated, and do not have a significant income, may not be required to file an ITR.
Lenders often consider ITRs as proof of income and financial stability. However, in the absence of an ITR, alternative documents such as bank statements, salary slips, or business invoices can be used to demonstrate income and secure loans.
Also Read: How to e-Verify Your Income Tax Return
Alternative Documents and Proofs to Secure a Personal Loan Without ITR
To secure a personal loan without an ITR, you can provide the following alternative documents and proofs:
Bank Statements: Recent bank statements (typically 6 months) that show a steady flow of income and savings.
Salary Slips: Pay slips from your employer that indicate your monthly income and job stability.
Form 16: A certificate issued by your employer as proof of your income, especially for salaried individuals.
Credit Score Report: A good credit score indicates your creditworthiness and repayment history.
Invoices and Receipts: For business owners or freelancers, proof of ongoing transactions can demonstrate the business’s financial health.
Employment Details: Proof of employment, such as an employment letter or offer letter, especially for salaried individuals.
Collateral (for Secured Loans): Offering an asset, such as property or fixed deposits, as collateral to back the loan.
GST Returns (for Self-employed): If you’re self-employed, submitting GST returns or other business financials can serve as proof of income.
Other Financial Documents: Investment statements, rental income receipts, or business financials (if applicable) can also be considered.
These documents help lenders assess your financial stability and repayment capacity even in the absence of an ITR.
Eligibility Criteria for Personal Loan without ITR
When you consider a personal loan without an ITR, you are required to fulfil the lender’s eligibility criteria. Every lender has loan eligibility criteria specific to them that you need to fulfil for loan approval. Here are the general eligibility criteria most lenders look for:
Good Credit Score: Lenders require a good credit score (above 750) to get qualified for a personal loan without an ITR. A strong score indicates your ability to repay the loan.
Stable Income: A solid proof of stable income through bank statements is important to compensate for the absence of an ITR.
Business Stability: For business owners, if you can provide proof that your business is running consistently and is stable, that helps the lender offer a loan on better terms.
Good Relationship with Bank: If you have a good equation with the lender bank, it helps to get personal loan at favorable terms
Impact of No ITR on Loan Terms and Conditions
Not having an ITR (Income Tax Return) can significantly affect the terms and conditions of your loan. Here’s how:
Higher Interest Rates: Without an ITR, lenders might view you as a higher risk, leading them to charge a higher interest rate compared to applicants with verified income.
Lower Loan Amount: Lenders may offer a smaller loan amount as they have less financial information to assess your repayment capacity.
Shorter Loan Tenure: Without ITR, lenders may limit the loan tenure, as they may prefer a quicker repayment period to mitigate risk.
Stricter Repayment Terms: Lenders might impose stricter conditions for repayment, such as higher monthly EMIs or more frequent repayments.
Collateral Requirement: To reduce their risk, lenders may ask for collateral (secured loan) if ITR is not provided, especially for larger loan amounts.
Higher Processing Fees: Some lenders may charge higher processing fees for loans granted without ITR due to the added risk.
In summary, not having an ITR may limit your loan options and result in less favorable loan terms, such as higher costs and stricter conditions.
Types of Personal Loans Available Without ITR
Secured Loans: You can apply for a personal loan with collateral like gold, property, fixed deposits.
Gold Loans: Gold is considered a valuable and stable asset. It is easy to get a personal loan against gold.
Loan Against Fixed Deposits (FDs): If you have an existing FD with a bank, you can avail a personal loan. The lender may offer lower interest rates as the FD acts as a security.
Payday Loans: Payday loan options are typically offered for salaried employees who want instant loans. These types of loans are short-term and have a high interest rate.
Microfinance Loans: These types of loans are given to small business owners and entrepreneurs that reside in the remote parts of our country, as they may not have access to traditional financial resources (like banks, stock market, credit cards)
Personal Loans with Co-applicants: Getting a co-applicant with a strong credit profile and high credit score improves your chances of loan approval.
NBFC Personal Loan: Many NBFCs offer personal loans to individuals based on other income documents like salary slips, bank statements or employment details.
Cash Loans from FinTech Platforms: Many lending platforms like Zype offer instant loans to individuals based on identity proof like PAN and Aadhar card details. The loan amount is disbursed quickly upon approval.
Thus, you can still explore these personal loan options if you do not have an ITR.
Tips for Securing a Personal Loan Without ITR
You can secure a personal loan without an ITR by taking these measures:
Provide Income Proof: If you are self-employed, you can provide invoices or receipts as proof of income
Build Strong Credit Profile: If you have a high credit score, it indicates to the lender that you manage finances responsibly and it assures them of repayment.
Offer Collateral: You can opt for a secured loan by submitting collateral like gold, FD or property.
Co-sign with Guarantor: You can get a loan if you co-sign the loan with an individual with a strong credit profile and steady income source.
Choose a Flexible Lender: Many banks & NBFCs do offer loan without requiring an ITR if you have a good equation with them
Limit Loan Amount: To get a loan without an ITR, you can opt for a lower loan amount. ITR is required when you apply for a large loan amount.
Conclusion
Whether you’re a freelancer or a small business owner, not having an ITR is a common situation for various reasons. However, this doesn’t mean you can’t secure a personal loan. Many lenders today offer loans based on alternative documents like salary slips, bank statements, or business invoices. These options make it possible to access personal loans with favorable terms. To get the best deal, compare lenders carefully and choose the one that aligns with your financial needs and as per your repayment capacity.
Frequently Asked Questions
Can I Get A Loan Without ITR?
Yes, it is possible to get a loan without an Income Tax Return (ITR) if you have other proof of income, a strong credit score, or a guarantor to back your application.
Can I Get A Loan If I Don't Pay Income Tax?
Yes, you can get a loan even if you don’t pay income tax. You are required to provide necessary documents like eligibility criteria and maintain a healthy credit score.
How Can I Get An Instant Personal Loan Without Proof Of Income?
You can get instant personal loans without income proof by exploring loan options like collateral loan, credit-score based loans or credit card loans.
Who Is Eligible For An ITR Bases Loan?
Eligibility criteria for an ITR based loan includes stable income, minimum requirement, age, credit score, valid ITR (last 2-3 years), bank statements, business financial statements, identity proof, and address proof and business vintage (for business owners and self-employed).
What Alternative Documents Can I Provide If I Don't Have An ITR?
If you don’t have an ITR, you can provide alternate documents including bank statements, pay slips, Form 16, business invoices, co-applicant or guarantor and property documents.
How Does Not Having An ITR Affect My Loan Application?
Not having an ITR can negatively impact your loan application by making it difficult to prove your income and financial stability, potentially leading to loan rejection or higher interest rates.
What Is The Maximum Loan Amount I Can Get Without An ITR?
The maximum loan amount you can get without an ITR depends upon the lender and the type of loan. For smaller loan amounts, a NBFC or financial institution may offer a loan based on credit score, credit history etc. However, for larger loan amounts, the lender requires ITR, to assess income.
Will The Interest Rate Be Higher If I Don't Have An ITR?
It may vary across lenders. If you don’t have an ITR, the lender may offer a loan at strict terms like high interest rate or short loan tenure, depending on your credit profile.
How Can I Improve My Eligibility For A Personal Loan Without An ITR?
To improve your eligibility for a personal loan without an ITR, you can provide alternative proof of income, such as bank statements, salary slips, or a good credit score. You may even consider offering collateral for a secured loan.
Is A Good Credit Score Sufficient To Get A Loan Without An ITR?
You can secure a loan without an ITR if you have a strong credit score. A good credit score not only increases your chances of loan approval but also enables you to negotiate more favorable terms with the lender.
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