Applying for Loans Without Pan Card
A personal loan is an unsecured loan that can be taken to cater to financial emergencies such as wedding expenses, payment of medical bills, home improvement, travelling or for making any major purchase. This type of loan is offered without any security for a tenure of one year-five year. The loan amount and interest rate are determined by the lender based on the applicant’s eligibility including his credit score. Repayment options are flexible in the form of monthly EMI that has to be paid on a given date by the borrower. Owing to the requirement of a few documents and providing instant disbursal, this type of loan product has become quite popular among millennials.
Getting a personal loan without PAN Card
PAN card, also known as the permanent account number is a 10-digit alphanumeric number that can be utilized to track an individual’s financial transaction. The card is issued by the Income Tax Department of India to each taxpayer in the country. PAN card also serves as a mandatory document for receiving salary, purchase of mutual funds, buying a life insurance policy or even getting a loan. The card also serves as an identity document proof that further makes it an important document one has to submit at the time of availing a loan.
Due to the tax laws in India, personal loan lenders have made it mandatory for loan applicants to submit a copy of the PAN card to avail the loan. However, one can get a personal loan without a PAN card only if the loan amount is below Rs. 50,000, but this condition too varies from lender to lender. On the other hand, if one loses out on the PAN card at the time of loan application, then simply submitting the 10-digit number is sufficient as the lender can assess your eligibility simply based on the number of the card.
Submission of PAN card is critical when applying for a personal loan as not doing so can lead to rejection of the loan. However, if you don’t have the card, then you can look to get it through the following ways:
- Ensure you have a high credit score: Having a high credit score is essential to be able to get a personal loan. The score determines the applicant's credit eligibility and helps lenders decide the fate of your application. Having a high credit score helps you get quick approval at a low-interest rate, whereas, a low score can lead to approval of loan at a high-interest rate of rejection altogether. The score ranges from 300-900 with 300 being the lowest and 900 the lowest. When applying for a personal loan, always check on the credit score as rejection due to low score can further decrease your chances to get a loan from another bank or lender.
- Submit your bank statement: Submitting your bank statement helps the lenders track your financial history based on which loan approval is given. The statement gives the lender an idea of your monthly credits and debits i.e. your existing EMIs, bill payments and monthly income. If not the PAN card, you can submit your bank statement or salary slip to help the lenders assess your credit eligibility.
- Maintain a good relationship with the bank: Establishing a good relationship with the bank helps you get a loan easily without a PAN card. Apply for a personal loan you hold your private banking or salary account with as the bank is aware of your financial transactions and can easily gauge your repayment capacity.
Few lenders in India provide you high amount personal loans without PAN card as the loan is disbursed simply based on salary, address proof or transactions.
Impact on interest rate
Getting a loan without PAN is likely to have an impact on the interest rate as this loan is of unsecured type and the lender is at huge risk. Personal loan in India is generally offered at an interest rate starting from 10%- 25%, however, the rates vary from lender to lender and completely depend on your eligibility criteria i.e. your credit score, income and other factors.
Get a personal loan from NBFC or online lender
To get a personal loan without PAN card, you can apply with an NBFC or an online lender. Most lenders in India utilize data-driven algorithms and social score to determine the loan applicant’s creditworthiness that makes it easy to get a loan without PAN card. In comparison to traditional banks, NBFCs and online lenders have simpler eligibility criteria and stringent rules and regulations that do not make PAN card a mandatory document to submit as other identity proof or address proof are sufficient to get the loan approved. Also, such lenders offer instant disbursals that makes them a favourite in the Indian lending space.