A financial crisis could happen at any time. You might need to get financial assistance through a personal loan to achieve certain life goals. This form of loan can be used for anything. It includes marriage, paying for a child’s education, buying a gadget, or even just an urgent medical issue. Whatever you use it for is entirely up to you.
Banks must assess a number of variables before granting you a personal loan. This includes your location, age, income, and type of employment. Because it defines your ability to pay EMIs and helps rule out any default repayment, income is one of the most important elements that banks pay close attention to.
Speaking of income, some people may not be able to apply for a personal loan since they do not have a pay stub. As long as you meet other requirements for approval, some banks will give you a loan even if you don’t have an income statement. For those with low incomes, there are many solutions available. We have several solutions for you to consider that are accessible to those with limited resources.
Loan against fixed deposit
You might have a fixed deposit account with a bank, but you might also require credit at the same time and not want to break your FD. Because your fixed deposit provides security for the loan, banks are glad to lend to you.
In this case, the lenders will typically remove the need for a minimum income to qualify for a loan. However, about 80% to 85% of the value of your FD would be required to qualify for a loan.
Additionally, you will be assessed interest that is 1-2 percentage points higher than the rate on your fixed deposit. For instance, if your fixed deposit is at 7.25 percent with the bank, the personal loan you receive on that fixed deposit may be in the 9 to 11 percent range.
Gold ornaments or gold bars can be pledged as collateral for loans that you can obtain. You can pledge your jewelry and obtain a personal loan from a variety of well-known gold loan providers in the industry.
Like personal loans secured by FDs, gold loans are determined by the amount of gold being pledged rather than your income level. Typically, personal loans are permitted for between 70 and 80 percent of the value of the pledged gold. It is wise to seek out well-established competitors with internal certified assessment and valuation services.
A processing fee of 1-2 percent of the loan amount is also assessed along with an interest rate on a gold loan that runs between 10 and 14 percent.
A personal loan from NBFCs
NBFCs are a crucial component of the lending sector. These are financial institutions, however, because they don’t belong to the banking industry, their lending policies are less restrictive.
Some cooperative banks and NBFCs do away with minimum income requirements and frequently lend on a case-by-case basis. In the case of cooperative banks, their current clients or members may receive preferential treatment while borrowing.
Although these financial institutions may have modest minimum income requirements, the rates of interest charged are substantially greater than those of normal banks. It is to account for the risk associated with lending. Depending on the amount of the loan being requested, they may additionally request security and certain collateral.
People who work at lower levels of society can apply for microfinance loans. They are accessible to housewives looking to start small companies as well as to economically disadvantaged communities.