Fake Salary Slip for Credit Card: 7 Career Risks

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Your income plays a key role in getting you a credit card. An individual with low income has to face many difficulties for card approval because poor salary means individual’s repayment capacity may not be good, in the eye of the bank.

On the other hand, many employers in India do not issue salary slip which is more problematic because for any bank approving credit card without income proof is risky since there is no way to evaluate credit worthiness of the applicant.

However the benefits and free money offered by the card company lures many. And many people often fake salary slip to get a credit card without by misusing company’s official stamp or letter head without thinking about the consequences of misdoings. Ideally such individuals show higher income on the pay slip and get cards with higher credit limit. In fact many a times, bank or third party agents ask applicants to produce counterfeit pay slip in order to meet their targets.

There are many repercussions of submitting fraudulent salary slip and any type of fake document while applying for a credit card as follows:

Job loss: After submitting documents required for credit card, banks or third party service do a thorough verification check for each and every proof submitted. If employer comes to know that an employee has generated fake pay slip, straightaway employee will be removed from the company. More consequences will follow.

Legal trouble: Bogus papers can also land you in legal trouble. Employer can sue the employee since he/she has forged the official document, signature and used official stamp to show high income. Even banks can file a legal case for submitting such fake documents. A case under Sections 420, 465, 465, 467 and 471 of the IPC will be applied.

Police case: If not legal case, either the employer or bank may file a FIR against such applicants.

Check out: Credit cards for low income earners.

No financing in the future: Even if you manage to get credit card but later default on the payments, banks will submit your report to CIBIL. And later during recovery process, if banks come to know the fraudulent documents were submitted, then this will also be reported to credit rating agency. And this would be a financial nightmare. Almost every bank verifies CIBIL record before approving any application. If bank comes to know about previous history, then they will not offer any type of finance.

Additional Read: consequences of credit default

New job: Getting a new job will become extremely difficult. This is because any prospective company will ask for previous employers offer letter, salary slip, and verify whether applicant has any police or legal case against his/her name. Non-availability of these documents because of termination from previous employer will naturally create a problem.

Passport denial: Whenever passport application is made, a thorough verification check is done to check any legal or police case is registered on the applicant’s name. Passport application will get rejected in such cases.

Visa trouble: Not just the passport, moving out of the country will also become extremely difficult. Whenever visa application is made, thorough investigation is done to verify applicant especially legal or police case against the applicant. No matter how talented you are, no country would ever want individual with criminal case against him/her to enter their country.

So bottom line is to be honest. Misrepresentation of facts for personal gain would never do any good and instead screw up your life in someway or the other.

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9 Benefits of PAN Card for NRI, Application Process, Documents Reqd.

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PAN (Permanent Account Number) is issued by Income Tax Department of India under the management of Central Board of Direct Taxes (CBDT). PAN is basically 10 alphanumeric characters, which are unique for every individual and hence serves as an identity proof as well. The government’s purpose of issuing a PAN card to all Indian citizens and NRIs is to keep a track record of all the monetary transactions of higher value. Moreover, a PAN card for NRIs and Indian citizens is an essential document that is to be furnished for all financial transactions above a specified limit set by the government.

Why do NRIs need a PAN card?

NRIs – be it the Indian citizen or the international citizen should hold a PAN card if he/she makes any of the following financial transactions in India:-

  1. Open a bank account or a Demat account in India.
  2. Apply for a debit card or credit card in India.
  3. Invest in mutual funds.
  4. Sell or purchase property or assets in India.
  5. Apply for a loan in Indian banks.
  6. Apply for a passport or visa.
  7. Apply for a foreign remittance.
  8. Deposit or withdraw more than Rs. 50,000 in a bank.
  9. As per the SEBI, PAN card is also required to trade in Indian stock market.

How NRIs apply for a PAN card in India?

The procedure to apply for PAN card in India is quite simple for all categories of individuals. However, NRIs need to furnish some specific documents when applying for a PAN card in India. NRIs, who are Indian citizens, can apply for a PAN card by filling from 49A whereas the NRIs with foreign citizenship such as OCI holders or who are not of Indian origin will have to fill form 49AA to get a PAN card. Both these forms can be filled and submitted on either of the two websites – UTIITSL and NSDL. On submitting the form, an acknowledgment receipt consisting of 15 digit number will be generated which a person needs to send to the designated address along with the required documents.

The fee to apply for the PAN card is Rs. 110 if the communication address is in India and if the address is of the foreign country, the payment of Rs. 1020 has to be made by the applicant. The fee can be paid online via debit/credit or net banking. Alternatively, a demand draft favoring UTIITSL or NSDL can also be dispatched along with the form and allied documents.

Once the process is done, your PAN card would reach you in 15-20 days at max. However, if the payment is made via demand draft, the PAN card will only be dispatched once the payment is received by the entity and hence it may take time.

Key points to note:

  1. NRIs can provide their foreign address as residential address and office address if they do not have any Indian address.
  2. Second, as PAN card shipping facility outside India is limited to some countries only, it is advised to first check whether the facility is available in your country or not before applying.
  3. The necessary documents that one needs to attach with the form are:-
  • One identity proof
  • One address proof
  • Two passport size colored photographs

Since money related transactions have become frequent these days, making PAN card mandatory for every individual including NRIs is a government’s initiative to keep track of all such transactions. A PAN card is used for payment of direct taxes, to file income tax return, a cash payment of Rs. 25,000 or more towards traveling to another country, deposit money exceeding Rs. 50,000/- and a lot more. So by now if you have not applied for your PAN (permanent account number), we advise you to do it right away to avail unlimited benefits offered by the government of India.

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5 Ways to Get Personal Loan for Employee of Proprietorship Company

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In an event of emergency, the most sought option to arrange money is personal loan provided all other alternatives such as own savings or help from acquaintances fail to meet the requirement.

However before granting loan; lenders first check the income and the employer’s credibility. If the applicant works in a big company (public or private limited) and meets all other criteria including CIBIL score, salary etc. then approval is quick.

However if someone works in a proprietor firm then it becomes a challenge to get finance. This is because lender also check the credibility of the company applicant works for. Since in a proprietorship company ownership is held by a single person, so risks such as sustainability, turnover etc. always exists. For e.g. if anything unfortunate happens to the proprietor, then the whole business may come to standstill and there will be uncertainty in the job of employees i.e. company may shut down or workers will not get salary and so on. And in such cases, if any employee is granted a personal loan then repayment will become difficult due to no income.

Although there are loans which you can get by keeping securities as collateral with the bank. We would be discussing such financing options in this article.

So how can employee of proprietorship firm get personal loan? There are few solutions as follows:

High income: If the applicant works in a proprietor run company but earns good income which is higher than required by the lender then he/she has higher chance of finance approval. In addition to this, if the company is into business for a long time and profitable too then also the chances of getting personal loan increases. Salary slip and bank statement as required by the lender will help to prove the income.

Against fixed deposit: If the borrower has FD account with the bank then he can get personal loan against this FD at a lower interest rate with minimal documentation. Most importantly lender won’t check the employer’s credibility. This type of a loan is secured as the FD is pledged with the bank. And applicant will get loan amount which is 80% – 90% of the FD amount.

Against securities: Employee from proprietorship firm can also get personal loan by keeping LIC policy, gold, mutual fund, ETF, and savings bonds as a security with the bank. Calculation of the loan amount varies with each financier. Some may have a cap on the amount while others may lend money depending on the market value of the pledged security.

Peer lenders: If all of the above solutions fail then individual working at proprietorship company can apply for personal loan at peer to peer online loan marketplaces. Borrower gets an option to choose the investors (basically money lenders) and at the same time bargain for interest rate. Although every P2PL company has its own eligibility criteria, applicant has vast options to choose a lender. Also called as PTPL, these marketplaces are secured way of getting personal loan and charges are very less compared to banks.

Private money lenders: This option is mentioned but should be avoided as much as possible. Because they take control of your assets such as property or gold or any other till the complete repayment is done. And there are cases of fraudulent activities conducted by these lenders of forging the documents and taking control of the assets. Negative sides of getting personal loan from them is that interest rate charged is very high and recovery process is very bad. Ofcourse there are few benefits such as no credit history check, quick disbursal of money, flexi-repayment option, etc.

Check out pros and cons of private money lenders.

So as mentioned above there are multiple options for employee of a proprietor owned company to get personal loan. Remember to payback all the EMI on time and fully which will help in getting a good CIBIL score.

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Personal Loan for Proprietor: 6 Options to Get Financing

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There are many kinds of business entities in India categorized as private limited, public limited and one person company also called as proprietor firm. Every business owner requires working capital to run their business or for personal use and most rely on taking loan. In case of proprietor based firms, single individual is the owner of the business establishment and has legal rights to own the assets and manage each and every operation.

For a proprietor, arranging money to keep the company functional is difficult as they have to mostly rely on their own money. And due to the risk associated with the business, since dependability is on one individual, lender takes cautious approach to offer loan. Banks do not want to bear a loss if such individual defaults.

So how to get personal loan if you are a proprietor? And who offers financing to the owner of such firms?

Firstly owner will have to get loan on his/her individual capacity since it is an unsecured loan. If you want financing for setting and running small manufacturing plant, service company etc. then there are multiple options to get loan to meet the requirement as follows:

Government loan (Mudra loan): Pradhan Mantri Mudra Yojana, an initiative by the Government of India offers finance to – manufacturing, trading and service sector units in rural and urban areas. These loans are offered by public, private, regional rural, urban co-operative banks, state-co-operative banks, micro finance institutions, non-banking finance companies in collaboration with the government.

Financing below Rs. 10 lakh are offered under Mudra loans and borrower needs to apply at the local branches of these financiers. Then the application will be reviewed and further processing will take place.

Micro finance companies: There are many such companies sanctioning the loan amount on the basis of just the income generating capacity of the borrower, management quality, cash flow, etc. Although micro enterprise gets small loan amount, proprietor or owner of such firms has a good chance to get loan to start or run the business. Every micro finance institution has their own eligibility criteria. For e.g. L&T Microfinance offers loans only to women borrowers, Agora finance offers loans only when applicant produces 2 guarantors amongst other criteria.

Against fixed deposit: If proprietor has FD account with the bank, then he/she can take personal loan against FD. The loan amount in this case is typically 80%-90% of the FD amount kept with the bank. Interest rate is also low as borrower is pledging FD as a security with the bank and most of the banks do not charge extra for prepayment closure. Almost every bank in India offers such kind of financing. Your FD investment remains intact.

Against securities: Another way to get personal loan for proprietor is by pledging securities such as mutual fund, equities, life insurance policy, exchange traded funds and savings bonds. Loan amount in this case is calculated depending on the type of the security kept. For e.g. in case of mutual fund/shares; loan amount is 50% of the current value. If you pledge insurance policy or bonds then there is a minimum and maximum amount cap which differs for each bank.

Against property: Another option for a proprietor to meet personal or business goal is by taking loan against property (commercial or residential or land). Property is kept as collateral with the bank. Instead of selling and arranging money, proprietor can mortgage property get personal loan against it. If tenure is short term then such loan should be taken. The cost of loan is low due to lower interest and amount which is nearly 50%-60% of the property value is given. And during the tenure of the loan, property cannot be sold/rented.

Loan from banks: This is a traditional option for a proprietor to apply for a personal loan at a bank. However lender may be hesitant to approve the loan because of the risks involved as there is no security or guarantor. This is the reason lenders have strict eligibility criteria before processing such applications. For e.g. ICICI Bank offers personal loan to proprietorship firm but with following eligibility criteria:

Minimum turnover of Rs. 40, 00,000 for non-professionals
Minimum profit after tax should be Rs. 2, 00,000 for proprietor firm

Likewise every bank has its own criteria for approval.

Remember, if loan application is completely genuine, business is conducted with fair practice, honestly, with complete transparency, and proprietor has a good credit history with excellent repayment history (if any) then there is always a good chance to get loan.

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19 Banks offering Personal Loan to Bank Staff (Retired Pensioner)

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Retired bank personnel (or pensioners) require money for meeting basic necessities during their golden years. Bank employees especially from government organizations make some kind of investments during their working career so that they get sufficient corpus in order to meet basic necessities. In addition to this, many individuals receive pension after their retirement.

However the corpus may not be sufficient if any emergency arises. Either they will have to use their personal savings or ask money to their children or acquaintances.

In such situations, personal loan for bank employee is a good alternative to get money and meet the necessities.

However any lender would first ask for income to evaluate credit worthiness and calculate loan amount that can be granted. Assuming post retirement, individual does not have income getting a loan is difficult and also the age factor can create hindrance. Most banks have a maximum age limit which is typically 60 years.

So how can bank employee get personal loan? There are many banks offering personal loan to pensioners (i.e. who are drawing pension from the banks where they were working). This also includes retired bank employees. The table below also shows age limit and loan quantum of the pension holder.

Name of Bank or FinancierAge Limit (at the date of maturity of the loan)Maximum Loan AmountRepayment Term
Union Bank of IndiaAbove 70 years allowed2 lakh3 Years
Canara BankAbove 65 years allowed4 lakh5 years
Syndicate BankOver 70 years1.50 lakh6 years
Indian Bank78 years6 lakh5 years
Andhra BankNA4 months pension5 years
Bank of IndiaAbove 75 years allowed1 lakh5 years
Allahabad BankAbove 65 years allowed1 lakh4 years
Punjab National BankAbove 75 years allowed7.50 lakh2 years
Dena BankMax. 80 years1.50 lakh3 Years
Oriental Bank of CommerceMax. 75 years5 lakhNA
Central Bank of IndiaAbove 75 years allowed2 lakhNA
United BankMax. 75 years10 LakhNA
Tamilnad Mercantile BankNAUpto 95% of one month pensionNA
Bank of MaharashtraUpto 73 years3 lakh5 years
IDBI Bank75 years5 lakh5 years
Vijaya BankMax. 72 years2 lakh5 years
South Indian BankUpto 55 years25 lakh15 years
UCO BankNA4 lakh3 Years
Corporation BankNAUpto 10 months NET Pension5 years

In the above table; age shows the maximum age on which loan matures.

Other options to get loan are:

Personal loan against fixed deposit: If retired bank personnel has fixed deposit account in the bank then he/she can get personal loan against FD. The quantum of the loan amount is typically 80%-85% of the amount kept in the account. The biggest benefit is that interest rate is low.

Against securities: Personal loan against mutual fund, gold, shares, insurance policy is another cheaper option to get loan. Borrower will have to pledge any of these assets with the lender and get loan against it. Since this is a secured loan, the interest rate is low.

Peer to peer lenders: Another emerging option to get loan is from peer to peer lending (P2PL) companies. Their eligibility criteria are different than banks.

Features of personal loan given to pensioners (including bank employees):

  • No processing fee by most of the banks
  • Loan amount is small since risk is high for the lender
  • Loan can be used for any purpose
  • Age criteria is relaxed compared to private banks such as ICICI, HDFC and others who have strict limitation
  • Not all banks ask for guarantor or security

From where should bank employee get personal loan?

Bank staff should keep in mind that more the money saved in their golden years, better would be the life. So first thing to do in order to meet emergency requirement is use own saving as much as possible and then take personal loan for the remaining amount required.

Always go for low interest loan. One way is to get personal loan against fixed deposit or securities. These loans are offered at lower interest rate compared to traditionally applied loans.

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10 Alternatives to Get Personal Loan with No Salary Account

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It is a very common scenario in India, employers do not create salary account in the bank for their employees, and salaries are paid in cash, due to whatsoever reason.

Although for an employer it does not create problem, but for an employee it is a big trouble especially when they approach lender for any type of loan (personal, home loan, car loan etc.) or credit card. Bank statement showing salary paid by XYZ employer or salary slip is the widely used document proof to verify the income of the applicant.
So can someone get personal loan without salary account or pay slip? Answer is YES but the process would be troublesome. But it is worth doing, because non-availability of these documents will make impossible for any lender to evaluate credit worthiness of the borrower and calculate loan amount.

Listed below are the options for working professionals wanting to get personal loan but having no salary account.

1) Provide salary slip: Although salary account is not available, you should ask for monthly salary slip from the employer. Pay slip is most valid document showing income of the working professional. And lenders will typically request last 3 months salary slip. However if the employer doesn’t even provide pay slip then read on following options.

2) Show cheque: Although you do not have salary account but if you are receiving salary through cheque, then it should not be a worrying factor when applying for personal loan. Take photocopy of last 6 months cheque and submit these as a proof. Cheque will ideally have payer’s name and signature and should ideally be accepted. This should be sufficient to justify the income and get personal loan with no salary account.

3) Provide statement from another bank account: If salary is paid in cash and you are depositing the cheque or cash given by the employer periodically, then bank statement of last 6 months will be helpful.

4) Get official letter from employer: If salary is paid in cash or cheque, then request for an official letter on employer’s official letter head bearing signature and stamp stating that salary of XYZ amount was paid in cash. Letter should ideally have amount, name of employee, date of salary, signature, and stamp of the authority from the employer’s end. Although loan providers won’t accept this, but still give it a try.

5) Show offer letter: Employee typically gets offer letter before getting a job containing salary breakup. You can use this as a supporting document in addition to the other document listed in this article to make your application stronger.

6) Income tax return: If you are regular tax payer then the recent IT return can be produced as an income proof. It is an officially acceptable document for a self-employed individual.

7) Personal loan against fixed deposit: Having an FD account with the bank is another way to get personal loan without salary account. Only requirement is that borrower needs to have FD account with the bank and depending on the amount lender will give loan amount which is 80%-90% of the amount kept. So higher the amount, higher would be the loan granted. Other benefits of loan against FD are no income proof required, less documentation, and low interest rate compared to traditional option.

8) Loan from peer to peer lenders: Also called as online marketplaces for loan, borrower gets an option to choose lender (individuals) who are ready to offer loan at lower interest. There is no middleman (i.e. bank) in the process and peer lenders differ from bank in many aspects. However they do ask for income proof but may accept proofs such as bank statement or cheque.

9) Personal loan against securities: Do you know that personal loan can be granted by keeping securities such as mutual fund, LIC policy, and gold with the lender? Since your belongings become security, loans are approved with minimal documentation and not very strict eligibility criteria. The benefits mostly remain the same as loan against FD along with no income proof requirement criteria.

10) Ask employer to provide personal loan: Despite of trying all the above mentioned options, if the personal loan application still gets rejected due to lack of income proof document, then ask your employer for a personal loan. Many employers in India offer personal loan to their employees at a lower interest rate. There would be no income proof required as they are ones issuing salary to you. You can also explain the need of money and options you have tried to get the loan.

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7 Options to Get Personal Loan against Cash Salary

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One of the most basic requirement for personal loan is pay slip. However in India, there are many employers offering salary in cash and that too with no salary account. This becomes a big problem for individuals requiring personal loan as lenders ask for salary slip in order to verify income and evaluate credit worthiness and loan amount. And non-availability of this document may result in loan application rejection.

So can you get personal loan against cash salary? Answer is YES. Here’s how:

Produce Income Tax Return: If an individual does not have salary account and files income tax every year then he/she may produce latest income tax return to the lender for verification. IT return with computed income is also considered a valid eligibility document. Lenders can evaluate whether the applicant is credit worthy or not and calculate loan amount based on this document.

Submit Bank Statement: You can get personal loan with cash salary and even if you do not have salary account but have a normal savings account in which you deposit money every month on a fixed date then it may help you to a large extent in getting personal loan. Ofcourse there are many other eligibility criteria to get the application approved apart from income proof. Lenders may ask you to submit bank statement of minimum 3 months or more.

Official letter from employer: In addition to the above mentioned two documents, if you can ask your employer to provide authorized document with signature on company letter head stating salary paid in cash then it your application will get little more weightage.

Offer letter: Working professionals typically get offer letter showing salary. However offer letter can act as an additional verification document. But solely on the basis of offer letter, you will not get loan.

If none of these documents work then employees getting cash salary can get personal loan through following two options:

Personal loan against fixed deposit: If you have sufficient funds in your normal bank account, then you can open FD and take personal loan against it. The loan amount in this case would be 80%-90% of the FD amount. Few advantages are – no income proof required, low interest rate and minimum documentation.

Personal loan against securities: You can also borrow money from lender against LIC policy, mutual fund, gold, shares, and property. In this case, investor has to pledge the documents as security to lenders such as public sector or private sector banks, finance companies offering loan. This option of getting a loan also provides advantage of low interest rate.

Loan from peer to peer lending: Another convenient option to get personal loan against cash salary is P2PL – peer to peer lending. These online marketplaces lets borrowers borrow money at lower interest rate from individual investors (basically lenders). Borrowers have an option to decide the interest rate.

Since personal loan is an unsecured loan, a loan taken against mutual fund/shares/fixed deposit is considered as a secured personal loan and hence lower interest, as the risk is lower for the lender. But in case of payment default, lenders have complete right to send a signed request fund from respective authority. The request contains transfer of the units and sending the proceeds / cheque to the lender. Same holds true while taking loan against FD. Lender will recover money from the FD account.

However remember that not to fake any document for getting any type of loan including personal loan. This mistake can even land you in jail or invite legal case against you.

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8 Low Cost/Investment Schemes for Poor by Indian Governement

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In recent years, Indian government for the welfare of poor people has launched various low cost schemes (i.e. requiring minimum investment or small amount of money).

Here is the list of schemes for poor people in India:

Sukanya Samriddi Yojana (SSY): Considered to be the most preferred deposit scheme, it was launched in January 2015. Meant only for the welfare of the girl child, investor needs to deposit sum greater than Rs. 500 every year for the tenure of 14 years. Once the girl child reaches the age of 18 years, 50% money can be withdrawn which can be used for the marriage or education. It is a 100% secured investment scheme and returns are fully exempt from section 80C of Indian income tax act. After the girl child reaches 21 years of age, she has complete right to withdraw money in addition to the return. Although this scheme is not specifically for poor since anyone can open account for the girl child.

Check out a table showing return after investing Rs. 30, 000 in samriddhi yojana.

Pradhan Mantri Jan Dhan Yojana (PMJDY): The objective of this scheme launched in January 2015 is to provide atleast one bank account in every household in India especially poor people. It is a zero balance account. Such was the response to PMJDY that it got entered into Guinness World Record for opening 11.5 crore bank accounts in just 5 months of launch. As on October 2017, 30.17 crore bank accounts have been opened with a total deposit of 66742.47 crore.

Pradhan Mantri Suraksha Bima Yojana: This is the world’s cheapest personal accident insurance scheme with an annual premium of Rs. 12 only. The product covers insured person for accidental death and disability at a lowest premium of Rs. 12. In case of any unfortunate event leading to accidental death and permanent total disability, insured person will get Rs. 2, 00,000 cover. And in case of permanent partial disability, insured will get Rs. 1, 00,000 cover.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): Another cheapest life insurance in India (in fact in the whole world), PMJJBY requires insured person to pay annual premium of just Rs. 330 and a coverage of Rs. 2 lakhs. And claim amount is paid only to the nominee.

Pradhan Mantri MUDRA Yojana: The objective of Micro Units Development & Refinance Agency Limited (MUDRA) bank loan is to provide low interest loan to enterprises who are currently not in the ambit of financial system and are not able to grow due to lack of financing. Minimum loan offered is Rs. 50, 000 and maximum loan offered under MUDRA scheme is Rs. 10 lakh.

Atal Pension Yojana (APY): This social security scheme’s objective is to provide pension to workers from unorganised sector during their retirement. The pension amount ranges from Rs. 1000 – Rs. 5000. Individuals need to contribute money when they are working and depending on the amount contributed and tenure, pension amount will be defined.

Pradhan Mantri Awas Yojana (PMAY): With an objective of providing a house to economically weaker section and lower income group, PMAY was launched. The target set by the government is 5 crore affordable homes to these people by the year 2022. Interested individuals who want to buy home under the scheme will be provided financial support, interest subsidy and direct subsidy.

Pradhan Mantri Jan Aushadhi Yojana (PMJAY): The objective of the scheme is to provide drugs and medicines at low cost through Jan Aushadhi stores. Government would also be providing financial assistance of Rs. 2, 50,000 for opening the store. However these stores can be opened only by private hospitals, NGOs, and other social groups.

There are many other schemes launched by Indian government but the above listed ones have generated great interest.

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No Salary Slip? 3 Ways to Get Personal Loan & Gather Income Proof

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In India, employers often make salary payments through direct credit in the bank, cheque, or cash. And not every company gives pay slip or salary slip at the end of each salary cycle due to whatsoever reasons.

For individuals who get salary directly credited in account every month, getting a personal loan is not very difficult (provided they meet all other criteria) since they can show bank account statement or salary slip as an income proof.
But those who get salary in cash or no pay slip can have problem when seeking any type of loan or credit card. This is because lenders ask for pay slip or bank statement to verify the salary and evaluate credit worthiness of the applicant. And in case of non-availability of these documents, lenders have no way to verify and the application may even get rejected.

So in such cases where salary slip is not provided by the employer, how can an individual get personal loan?

Listed below are three options to get personal loan when no salary slip or income proof is available:

Against FD: If you don’t get pay slip then opening a fixed deposit account and taking personal loan against the same is recommended. The money kept in FD will act as a security and lenders offer loan amount which is minimum 85% of the FD amount. Since this is a secured loan, the interest rate is on a lower side compared to traditionally taken personal loan, which is an unsecured loan.

Against Securities: Another type of secured personal loan is against securities. You can keep LIC policy, mutual fund, shares, gold, and few others. The biggest benefit of such loan is that banks charge interest only on the money which is utilized and not on the entire loan amount. Similar to loan against FD, interest rate is on a lower side for this option. Loan amount depends on the value of the securities.

Both the above mentioned options requires no income proof or salary slip.

You can also get personal loan against credit card.

Private Money Lenders: Although this option is not recommended because of high interest and bad recovery process, they should be considered as a last option, if the money required is urgent. These lenders are basically local money lenders (not all are government approved).

How you can still gather proof?

If you are getting salary in cash on a specific date and you deposit the whole amount in your bank account then you can show your passbook entry or bank account statement as a proof to the lender while applying for a personal loan. Bank statement of 1 year is a valid financial document to show your income.

Ask for a letter from your employer stating that salary has been paid in cash on a particular date. This may help to a certain extent. Especially co-operative bank can consider your application, as their eligibility criteria are not very stringent.

IT return statement: If you are filing income tax return every year then it can act as a best proof for getting a personal loan.

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Fake Salary Slip/Documents for Personal Loan: 6 Dangerous Implications

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You can get financing for anything – medical expenses, marriage, child’s education, buying car and house, etc. And personal loan is the most ideal choice of borrowers. There are plenty of lenders out there in the market to attract potential customers with various offers for loan. Anyone – salaried, self-employed, businessmen, and others can get loan.

However income proof of the borrower is the most important document required by the lender before approval. Borrower’s monthly/annual income plays a key role in evaluation of credit worthiness. And for the lenders to verify the income stated while filling up the application proof, of the salaried or self-employed individual, monthly salary slip, IT return or bank statement is the only document.

However many employers in India still offer salary in cash. So for such employees, getting a personal loan becomes extremely difficult. This is because, lenders have no way to verify the source of income. In some companies or freelancing jobs, individuals are not given salary slip, which again creates problems when applying for a loan.

And it is very common scenario that borrowers generate fake salary slip and other documents such as bank statement, IT return, Form 16, duplicate PAN card etc. to get a loan. This also applies to individuals who are earning low salary as well. Applicants use software to generate fake documents easily. But forging the documents comes with unforeseen risks.

Additional reading: Personal loan for low salaried person.

And borrowers are not aware of the implications of providing fake documents for getting any type of financing including personal loan. And most importantly they are unknown of intelligence used by the banks to identify genuine loan applications.

Here are the implications of fake salary slip for personal loan:

Legal prosecution: If someone manages to fake pay slip and get loan, then lender has complete authority to take legal route if this is cross verified. And if this happens, future will be at risk. And probability is extremely high that no employer will offer job in the future. If forging the documents go unnoticed at the time of application verification and someone managed to procure loan but later that person fails to repay loan then lenders can take legal route and confiscate bank account or other property and criminal proceedings will follow. The borrower may even end up in the prison and the whole life will become miserable.

Lose employer’s trust: If lender verifies applicant’s income from his/her employer then it can put the trust at stake and may also result in job loss. And getting a new one will become difficult, as you may not get experience letter or relieving letter from the existing employer.

Credit score downgrade: Such frauds will straightaway result in downgrading of credit rating.

No bank loan in the future: Because of credit score downgrade, no lender will offer financing or credit card in the future.

Immigration problem: If criminal case is booked then moving out of country will become impossible. Most countries ask and verify criminal case on the visa applicant’s name. If you do not have passport, then getting the same will be problem.

PAN card blacklisted: Most importantly, PAN card may get blacklisted for the life. And getting a new one will be impossible.

Remember that faking anything in today’s world is illegal. One mistake can ruin the life.

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