Home loan without documents – is it really possible to get one? Today, you can get a home loan online by filling out a simple application form and uploading a few documents. While lenders accept minimal documentation, they still need some records to verify your background and ability to repay the loan.
Suppose you need a housing loan but do not have a stable job and regular salary. Can you still apply for a loan without submitting any proof of income to support your application? The answer is yes. You can go for a loan scheme called a no-document housingloan.
Are you curious to know in which cases lenders give you a home loan without any documents (if they do so at all)? Read this article to learn more.
When can you apply for no-document housing loans?
You can apply for a no-document loan if you don’t have a regular income or a good credit score. There are two types of loans you can choose from:
1. No-ratio home loans
When you apply for a no-ratio home loan, you do not have to disclose your income details to your lender. So, they cannot find out your debt-to-income ratio. So, if you do not have a consistent income but have a good credit history, this means there is still hope for you to buy your home and avail a home loan. You can apply for a no-ratio home loan without documents.
2. Unorganised sector home loans
If you have an unstable income and a poor credit history, you can choose an unorganised sector home loan. However, note that the interest rates for these types of loans can be high.
How do lenders decide your loan amount?
When you apply for a no document home loan, your lender calculates your total amount by considering the following factors:
- Your earnings for the last two years. They may estimate these through records other than your income documents.
- Your bank statements or income tax returns (ITR)
Things to consider
While this is exciting news, you must bear in mind a few important points to consider. When you take a housing loan without documents, the following conditions apply:
- Higher interest rates: When your lender does not have proof of your income, they cannot judge your repayment ability. They may rely on certain documents like bank statement or ITR but cannot predict a trajectory of inflow of your funds in future. Thus, more risk is involved for the lender, and you will have to pay higher interest rates and a high EMI amount each month to off-set the potential risk.
- Longer approval time: A loan application without documents has a lengthier approval period. However, your lender can issue you a sanction letter quickly. In this context, the sanction letter does not imply loan disbursal. It simply means that you are eligible for a home loan from the lender. While many lenders issue the sanction letter based on the information you provide at the time of application, they may require a detailed verification later.
While no-document housing loans are not fraudulent schemes, you should carefully consider the implications involved before applying. Go through the loan terms and decide if it is suitable for you. But, if you do not need a housing loan immediately, it is better to wait till you have a regular source of income rather than bear the burden of high EMI payments.
If you need affordable home loans with minimal documentation and flexible repayment options, turn to a reputable lender such as Tata Capital. You can visit our website page to check your home loan eligibility and apply online.