Most lenders look into the financial profile of an individual before approving a loan or an insurance policy. They do so in order to verify the repayment capabilities of the borrower. One of the ways to check the repayment capabilities is by checking your salary slips. Salaried individuals receive salary slips from their respective companies. It shows the break-up of salaries like basic salary, allowances, and fund deductions. However, there are other ways to apply for a loan or an insurance policy in case you don’t have the privilege of salary slips.
In this article, we will take a look at some of the alternate ways to apply for a loan or insurance policy.
- Mortgage an asset as security
If your lender accepts asset-backed loans then you can mortgage assets like high-value FDs, homes, mutual funds, or gold in place of Employee salary slips so that they can gauge your repayment capability. With the help of the asset, you will be able to apply for the loan or an insurance policy, even if you do not have the required documents to back your current finances.
- Maintain a Healthy Credit Score
Keep your credit score high. Credit score portrays your repayment history, credit handling habits, and whether you have been able to repay debt in your past. Try to keep your credit score above 750 since this will verify the fact that you can handle the credit properly. It will give your lenders an indication of your creditworthiness and they will know how you are going to manage loan EMIs in the future.
You can improve your credit score by avoiding taking multiple loans at a time and by checking your credit score frequently.
- Establish a good relationship with your bank
Another way of applying for loan and insurance policies is by remaining faithful to your bank in case of all financial and non-financial services. This will not only help the bank in deciding your loan or insurance policy eligibility but also your repayment capacity. In case you are applying for a loan or insurance policy at the bank where you have your main account, the bank will be able to decide whether you are eligible for it as they can verify all the transactions made on your account. This will allow them to assess your creditworthiness. Thus, the bank will not ask for income proof documents like salary slips if you have made all the timely repayments in the past.
However, a missed payment is a sign of incapability of handling finances and therefore the bank will ask you to submit the latest salary slips.
- Show an alternative income proof
If you are self-employed, a part-time employee, or a freelancer then you might not have a salary slip. In such cases, you can show financial documents like income certificate, bank account statements, ITR, Form 16, income of one’s spouse or parents, to validate your income. These documents ensure lenders of the repayment capacity of the borrower and help the latter to qualify for a cost-effective loan quickly.
- Sign up for Funding with another individual
You can also apply for a personal loan or insurance policy along with another creditworthy individual in case you don’t have bank statements or salary slips. Your co-applicant’s steady income will ensure the lender about your repayment capabilities. However, your co-applicant will have to submit proof of his/her income. Co-applicants usually serve as non-primary sources of repayment. Hence, in case you fail to make repay some amount then your lender may ask your co-applicant to repay it on behalf of you. In this way, you can get funds easily.
Conclusion
The above ways are alternative to salary slips and will make you eligible to apply for a loan or insurance policies.
