If you receive your salary in cash, you might wonder whether you can still get a personal loan. The good news is yes, you can! Getting a personal loan against cash salary is absolutely possible with the right documents and approach. Many lenders now accept alternate income proofs like bank statements, ITR, employer certificates, or even income affidavits to verify your earnings.
Whether you’re looking for a loan against salary to meet urgent expenses or an instant personal loan for cash salary to cover medical or personal needs, there are multiple ways to apply – even without salary slips. Here’s everything you need to know.
Ways to Get a Personal Loan Without Salary Slips
1. Provide Your Bank Statements
If you receive cash salary, deposit it regularly into your bank account. Your bank statements can then act as proof of income. Most lenders require 3–6 months’ statements to evaluate your repayment capacity. This is one of the easiest ways to get a loan on cash salary without salary slips.
2. Submit Your ITR (Income Tax Return)
Your ITR is one of the strongest proofs of income for cash-salaried employees. It shows your annual earnings and tax compliance, giving lenders confidence about your financial stability. If you haven’t filed your ITR yet, consider starting this practice – it not only makes you eligible for a personal loan against cash salary but also keeps you compliant with tax rules.
3. Show Your Offer Letter or Salary Vouchers
Your appointment letter, salary vouchers, or even an income affidavit can be submitted as alternate proof. These documents must clearly mention your job title, monthly pay, and employment terms. If your lender doesn’t accept offer letters alone, request salary vouchers for the past 3–6 months from your employer.
4. Get a Letter from Your Employer
An employer certificate or letter confirming your employment status and salary is another valid proof. Make sure it is on the company letterhead, has the official seal, and is signed by an authorised person.
5. Use Alternate Income Proofs
Apart from the above, you can also submit supporting documents such as:
Income affidavit (stating your monthly salary)
Rent agreement (if you earn from rental income)
Proof of additional income sources (like freelance payments or commissions)
How to Apply for a Personal Loan with a Cash Salary
Here’s a simple step-by-step process to apply for a loan on cash salary:
Check Eligibility
Minimum age: 21 years (varies by lender)
Proof of income: Bank statements, ITR, employer certificate, salary vouchers
Good credit score (ideally 700+)
You can also apply with a co-applicant who has a banked salary to boost your approval chances.
Look for lenders that offer instant personal loans for cash salary applicants and accept alternate proofs.
Apply Online
Most lenders, including Fibe, let you apply completely online. Fill in your personal and employment details, upload the documents, and submit the form.
Verification & Disbursal
Once your documents are verified, your loan against salary gets approved, and the amount is credited directly to your account – often within 24 hours.
Repayment Terms You Must Know
Before taking a personal loan, check:
Tenure: Usually ranges from 3 months to 48 months
EMI amount: Make sure it fits within your monthly budget
Prepayment charges: Some lenders allow early repayment without fees
Interest rates: Compare lenders for the best rate
Maintaining timely repayments helps improve your credit score and makes it easier to get future loans.
Why Choose Fibe for Your Loan?
With Fibe, you can get up to ₹5 lakhs even if you receive your salary in cash. We accept multiple income proofs and keep documentation minimal. Our process is 100% digital with no hidden charges and affordable EMIs. Simply download the Fibe app or apply on our website and get funds quickly.
FAQs on Personal Loan Against Cash Salary
Can I get a personal loan if I get a salary in cash?
Yes, you can. Use bank statements, ITR documents, employer letters, or salary vouchers to prove your income.
Can I get a loan if I earn in cash?
Yes. By depositing your cash salary into your bank account and filing ITR, you can easily qualify for a personal loan.
Can I get a personal loan without pay slips?
Yes. Provide alternate income proofs like bank statements, employer certificate, ITR, or income affidavit.
Offering a fake loan approval letter is a common tactic scammers use to entrap innocent people. Using a fake approval letter, lenders extend a lucrative and enticing loan offer, which can lead to huge financial loss if you accept it. Thankfully, identifying such attempts by fraudsters is not difficult if you know what signs to look out for.
Read on to learn the signs of a fake loan approval letter.
Missing Details in the Letter
An authentic pre-approval letter generally contains the following details:
Name of the lender
Lender’s contact information
Date of issuance
Name of the borrower
Pre-approved loan amount
Loan tenure
Equated monthly instalment (EMI amount)
If you find any of this information missing, then you may consider it as a scam attempt. However, if you compare an authentic and fake loan approval letter template, you’ll see that there isn’t a lot of difference, which makes you more vulnerable. So, you need to be very cautious before opening or accepting any offer.
Too Good to Be True Offers
Scammers may present a very attractive interest rate or large loan sum to solicit more clicks on the fake loan approval letter. They may also propose loans at lower than general interest rates to make you feel special.
However, banks decide interest rates based on the Reserve Bank of India guidelines. Banks do not have permission to provide loans lower than decided interest rates. So, make sure you don’t succumb to such offers and accept the letter or initiate further inquiry.
Upfront Fee
When applying for any loan, lenders charge a processing fee to cover the cost of administrative expenses. This amount is generally a percentage of the loan amount, but some banks may also charge a fixed nominal amount, which is disclosed on their website.
While lenders deduct this fee from the loan amount only before disbursal and not before, fraudsters may request it before disbursement. After accepting this payment, they may not disburse the loan amount, leading to a loss. So, don’t pay any upfront fee unless you are sure about the lender.
Discrepancy in Lender Information
Another indication of a fake loan approval letter is errors in the lender’s details. They include:
Mismatched company logo
Incorrect office address
Incorrect or invalid contact number
Missing or unofficial email address
Unreliable authorised signature
You can cross-check the information and contact the lender immediately to verify the legitimacy of the letter.
Financial institutions offer pre-approved loan offers based on the information that they have, based on previous enquiries or communication. So, the chances of them having incorrect details are slim. If you find any error in the details, avoid further communication.
In addition to the above signs of a fake approval letter, here are some more warning signs of online loan scams that you should remember:
Guaranteed Approval Without a Credit Check: No financial institutions can guarantee 100% approval without assessing your credit score and other factors
Lack of Physical Address: Not mentioning any physical address makes it difficult to catch such fraudsters, so this must be the first thing you should look for when applying for loan online
Creating a False Sense of Urgency: Fake loans usually mention a limited-period offer; this provokes you into clicking without rationalising the offer
Unsecured Website: Always look for ‘https’ and a padlock sign in the lending platform URL, as it indicates that the page is secure and your data is safe
Out-of-the-blue Communication: Normally, financial institutions only contact you if you have already applied or enquired about a loan offer
Keeping these points in mind will help you detect a scammer instantly. If you want to apply with a secure lending platform, look no further than Fibe. Our Personal Loan App has a PCI DSS App-based journey, which allows you to get quick and secure credit.
Further, the ISO/IEC 27001 certification ensures that your data is not at risk. With Fibe, you can also enjoy pocket-friendly interest rates and quick disbursal on an Instant Personal Loan of up to ₹5 lakhs. So, download the app or visit our website to get started!
FAQs on Fake Loan Approval Letter
How do I report a fake loan?
To report online fraud to the cybercrime department, you can opt for the following option:
Report online at https://cybercrime.gov.in/
Call the cybercrime hotline number 1930
Call the area-specific number mentioned under ‘Contact Us’ on the official website
How do you deal with fake loan harassment?
As soon as fake loan harassment starts, you must report the incident to the police.
How to identify a fake letter for loan approval?
To identify a fake letter for loan approval, check out the following points.
When you take a loan, three things decide how much you’ll repay in total — the loan principal amount, the interest rate, and how long you take to repay it. That’s why it’s super important to understand how these factors affect your loan and monthly budget.
By calculating the interest in advance, you can see if the loan fits your needs and even tries to negotiate better terms. This can help you save a good amount over time!
Let’s break down how to calculate the principal and interest with simple examples — plus some smart tips to lower your total interest.
What is Principal Amount and Interest in Loan?
A principal is the sum of money you borrow from your lender. Similarly, interest is the cost of borrowing for extending their services and is a percentage of the principal charged by the lenders. These numbers form the core factors for calculating your interest and EMI amount.
When you apply for a loan, the lender offers you an interest amount based on your eligibility, which dictates your borrowing costs. You can calculate your monthly loan instalment with the formula:
EMI = [P X R X (1+R) ^N]/[(1+R) ^N-1]
Where P = Principal, R = Annual interest rate, N = Total tenure
While manual calculations can get tough, using an online personal loan EMI calculator is ideal to get accurate results. Note that each EMI payment goes toward clearing the loan principal and interest charged.
The Formula for Principal and Interest
The interest is computed based on your outstanding loan amount. The Annual Percentage Rate (APR) implies the annual cost of your loan. It includes various other costs, such as:
Processing charges
Administrative fees
Insurance premiums, etc
Therefore, you can calculate the interest paid for the first month with the formula:
Interest Repayment = Principal Loan Amount X Annual Percentage Rate /12
After calculating the interest, you must subtract this sum from the EMI to calculate the principal amount paid. Thus, the principal amount formula is:
Principal Repayment = EMI – Interest Repayment
This Principal Repayment is then subtracted from the opening loan principal. It is done to calculate the outstanding principal:
Outstanding Principal = Opening Loan Amount – Principal Repayment
This way, you can calculate next month’s interest repayment amount using this outstanding principal. Following steps until the end of tenure will create an amortisation schedule.
Interest Amount Formula
The interest amount can be calculated with the simple formula:
SI = (P X R X T)/100
In this formula, P stands for principal amount, R stands for the rate of interest, and T stands for time or tenure.
Principal Amount Formula
To find the principal amount within a simple interest investment or loan, the applicable formula is:
A= P (1+rt)
In this formula, ‘A’ is the current value known, ‘r’ will be the decimal value of interest rate per time, and ‘t’ will be the time period number.
Principal and Interest Calculations
Here’s an example to better understand the process of calculating the principal amount and interest. Say you take a personal loan of ₹25,000 and your interest rate is 16% p.a. for a tenure of 12 months. Then:
P = ₹25,000, R = 16%/ 12 or 1.3% per month, N = 12 months
So, EMI = [P X R X (1+R) ^N]/[(1+R) ^N-1] = ₹2,268. EMI = ₹2,268
Now, the principal amount will attract interest as such:
Interest Repayment = Principal Loan Amount X Annual Percentage Rate /12
Interest Repayment = ₹333.33
To calculate the principal paid in the first month:
Principal Repayment = EMI – Interest Repayment
Principal Repayment = ₹2,268 – ₹333.33
Principal Repayment = ₹1,934.67
To calculate the outstanding balance:
Outstanding Principal = Opening Loan Amount – Principal Repayment
Outstanding Principal = ₹25,000 – ₹1934.67
Outstanding Principal = ₹23,065.33
Using this outstanding balance, we calculate the interest for the next month and so on.
How to Reduce Your Interest Burden?
Since a high interest affects your total repayable amount and your EMI, you must opt for the lowest interest option to save more. Here are a few steps you can follow for doing so:
Choose a longer tenure option to lower interest rate
Negotiate with your lender for better loan terms
Lower your credit utilisation ratio
Opt for prepayment and foreclosure options based on the amortisation schedule
Note that these terms depend highly on your eligibility and credit behaviour. A high credit score and good repayment history result in lenders offering loans at an attractive interest rate.
With the Fibe Instant Cash Loan, you can easily get an amount of ₹5 lakhs at a nominal interest rate with quick disbursal. You can also choose from a flexible tenure range of up to 36 months. Download the Personal Loan App on the Google Play Store or App Store or visit our website to apply now!
FAQs on Principal and Interest Calculation
How do you find the principal amount?
The principal amount is the amount of loan applied by an individual or a business entity. You can find it in the loan agreement provided by the lender.
What is the principal formula in Excel?
The formula for calculating principal in Excel is:
Number_of_periods is the number of months in a year
Present_value is monthly EMIs
What is the principal amount on a loan?
The principal amount on the loan is the sanctioned value credited to your bank account by the lender. So, if you apply for a ₹5 lakhs loan, this amount is your principal amount.
Can interest be more than the principal amount?
No. According to the India Code States Act, a lender cannot charge an interest sum that is greater than the principal or loan amount.
Are you wondering how to close a personal loan early and save money on interest? The preclosure of a personal loan (also called foreclosure of personal loan) lets you repay your entire outstanding loan amount before the end of the tenure. This not only reduces your interest outgo but also helps you become debt-free sooner.
Before you go ahead, it’s important to calculate whether the savings outweigh the charges and check if your lender allows pre-closure after the mandatory lock-in period.
This guide covers everything you need to know, the meaning, benefits, charges, documents required and credit score impact, so you can make the right choice.
What is Personal Loan Pre-closure?
Personal loan pre-closure means making a lump sum repayment of the outstanding principal and interest before the scheduled tenure ends. Lenders call this a foreclosure of personal loan because your account is closed before its original term.
You can usually do this only after the lock-in period, which is typically 6–12 months. If you don’t want to close personal loan completely, you can also opt for partial prepayment, where you pay a portion of your loan early to reduce EMIs or tenure.
Is it Good to Close a Personal Loan Early?
Yes, but here are the factors you should check before going for preclosure of personal loan:
Save on Interest: The earlier you repay, the more you save on total interest.
Foreclosure Charges: Lenders may charge 2–5% of the outstanding principal as fees.
Financial Readiness: Ensure you have enough funds and won’t affect your other goals.
Lock-in Period: Confirm you have completed the required lock-in months.
Credit Score Impact: Preclosure has a small temporary effect but improves your score over time.
Consider Partial Prepayment: If funds are tight, reduce EMIs through partial prepayment rather than full closure.
Partial Prepayment vs. Full Pre-closure
Aspect
Partial Prepayment
Full Pre-closure
Payment Amount
Pay part of your principal
Pay entire principal + interest due
Effect on EMIs
EMI/tenure reduces gradually
Loan closed completely
Charges
Usually lower or NIL
Usually 2–5% of principal
Savings
Moderate savings on interest
Maximum savings on interest
Additional Documents Required for Pre-closure
To close personal loan successfully, lenders may require the following documents:
Loan account statement with outstanding balance
PAN card / Aadhaar card (for verification)
Cheque/Demand Draft/Netbanking proof of payment
Written request for pre-closure
Loan agreement copy (if needed)
Important: After payment, collect a No Objection Certificate (NOC) and closure confirmation to update your credit report.
Impact of Pre-closure on Credit Score
Foreclosure of personal loan does not harm your credit score in the long run. Initially, your score may dip slightly due to change in credit mix, but over time, being debt-free improves your credit health and CIBIL score.
Things to Consider Before and After Pre-closure
Verify lender’s pre-closure policy and charges.
Maintain enough funds before initiating the process.
Avoid liquidating critical investments unless savings are significant.
Choose partial prepayment if full payment stresses finances.
Update your credit report after closure for accuracy.
Close Your Loan with Fibe Easily
With Fibe Instant Cash Loan, you get up to ₹5 Lakhs at affordable interest rates and the option to prepay or foreclose easily. This allows you to repay on your terms and save on interest.
Download the Fibe App or visit our website today to apply and manage your loan with complete flexibility.
FAQs on Pre-Closing a Personal Loan
1. Does early closure of the loan affect CIBIL score?
No major negative impact. Your score usually improves over time once the loan is marked ‘closed’.
2. Can I pay all EMIs at once?
Yes, this is called foreclosure of personal loan. Check if any pre-closure charges apply.
3. Can I close a personal loan in 1 year?
Yes, if your lender allows preclosure after the lock-in period (generally after 12 EMIs).
A loan guarantor is a person who agrees to repay a borrower’s loan if the borrower fails to do so. Guarantors help improve loan approval chances, especially for borrowers with low credit scores, insufficient income, or limited credit history.
In this blog, we’ll understand the meaning of a loan guarantor, their role and responsibilities, eligibility requirements, types of guarantors, associated risks and what happens if the borrower defaults. We’ll also compare guarantors with co-signers and explain when lenders may require one for loan approval.
Loan Guarantor Meaning
So, what is guarantor in loan? A loan guarantor is a person who agrees to take legal and financial responsibility for a borrower’s loan if the borrower is unable to repay it. In short, the guarantor acts as a financial backup for the lender.
Unlike a co-signer who shares joint responsibility from the very beginning, a guarantor’s liability usually arises only when the borrower defaults on repayment. This means the guarantor is not expected to make regular EMI payments unless the borrower fails to do so.
According to RBI guidelines, lenders are allowed to define their own internal policies regarding guarantors based on the borrower’s risk profile.
Types of Guarantors
There are mainly two types of guarantors in lending:
1. Financial Guarantor
A financial guarantor agrees to repay the borrower’s loan if the borrower defaults. The lender evaluates the guarantor’s income, credit score, repayment history, and financial stability before approval.
Let’s say, a father becomes a guarantor for his daughter’s education or personal loan.
2. Non-Financial Guarantor
A non-financial guarantor primarily confirms the borrower’s identity, residence, employment, or credibility rather than repayment capacity.
For example; an employer confirms an employee’s job stability and employment status.
Personal Loan Guarantor Requirements
To become a guarantor for a personal loan, an individual usually needs to meet certain eligibility criteria set by the lender.
Common Requirements Include:
High credit score
Stable source of income
Strong repayment history
Low credit utilisation ratio
Financially stable employment profile
Typically, the guarantor can be a:
Parent
Spouse
Sibling
Relative
Close family friend
Standard Eligibility Criteria for a Guarantor
Requirement
Typical Criteria
Minimum CIBIL Score
Usually 700 or above
Age Range
Generally 21 to 65 years
Employment Type
Salaried or self-employed with stable income
Income Stability
Consistent monthly income preferred
Credit History
Clean repayment track record
Lenders may have slightly different eligibility rules depending on the loan type and risk assessment.
Documents Required to Be a Guarantor
A guarantor usually needs to submit the following documents during the loan application process:
Lenders may ask for a guarantor in situations where the borrower’s repayment capacity appears risky or insufficient.
Common Scenarios Include:
The borrower has no credit history
The applicant has a low CIBIL score
The borrower recently started a new job
Income is insufficient for the desired loan amount
The borrower already has multiple ongoing loans
In such cases, a guarantor reduces the lender’s financial risk and improves approval chances.
For unsecured loans like personal loans, lenders may ask for either:
A guarantor, or
Collateral/security
Since personal loans usually do not require collateral, having a guarantor acts as an alternative form of repayment assurance.
Real-life example:
A self-employed freelancer with fluctuating monthly income may struggle to qualify for a high-value personal loan independently. However, adding a salaried guarantor with stable income can significantly improve approval chances.
What is the Role of a Guarantor in a Loan?
A guarantor plays an important legal and financial role in the loan process.
Key Responsibilities Include:
Signing a legally binding agreement with the lender
Assuring repayment if the borrower defaults
Covering unpaid EMIs, penalties, and interest dues
Supporting the borrower’s loan eligibility
Helping lenders minimise repayment risk
The guarantor’s responsibility can continue until the entire loan is repaid.
Importance of a Loan Guarantor
A guarantor can significantly improve the borrower’s loan approval chances and strengthen the lender’s confidence.
Why Guarantors Matter
They provide financial security to lenders
They improve loan eligibility for borrowers
They help first-time borrowers access credit
They may help borrowers secure higher loan amounts
They improve approval chances for low-credit applicants
They can support faster approval for urgent funding needs
A creditworthy guarantor may help the borrower secure better loan terms, including lower interest rates, due to reduced lender risk
For example, borrowers with thin credit files may receive lower interest rates if backed by a financially stable guarantor.
Although many people use these terms interchangeably, a guarantor and a co-signer are different.
Aspect
Guarantor
Co-Signer
Liability
Secondary — steps in only if borrower defaults
Primary — equally responsible from the start
Loan Ownership
Not a joint borrower
Considered joint borrower
Credit Impact
Usually affected only upon default
Appears on credit report immediately
EMI Responsibility
Conditional
Shared from day one
Release Options
Limited until repayment
May be released if lender permits
Example:
If your parent acts as a guarantor, they pay only if you fail to repay. But in a co-signed loan, both parties share equal responsibility from the beginning.
What Happens If the Borrower Defaults?
If the borrower stops repaying the loan, the lender can legally demand repayment from the guarantor.
Consequences for the Guarantor May Include:
Liability to repay pending EMIs
Negative impact on CIBIL score
Legal notices and recovery proceedings
Difficulty obtaining future loans
Reduced borrowing capacity
In some cases, lenders may directly approach the guarantor without exhausting all recovery efforts against the borrower first. That is why becoming a guarantor should always be a carefully considered decision.
How to Choose the Right Guarantor for Your Personal Loan
Selecting the right guarantor is extremely important for smooth loan approval and repayment security.
Tips for Choosing a Suitable Guarantor
Choose someone with a strong credit score
Ensure they have stable income and employment
Discuss responsibilities openly before applying
Pick someone financially disciplined
Ensure the guarantor understands legal obligations
Things a Guarantor Should Consider Before Agreeing
Why the borrower needs the loan
Whether the borrower has repayment capacity
Whether they can repay the loan themselves if needed
The borrower’s financial discipline and trustworthiness
The total liability involved, including penalties and interest
A guarantor should always read the loan agreement carefully before signing.
Conclusion
A loan guarantor can make it easier for people to get a loan when they do not meet all of the lenders requirements. This can be a help for people who are borrowing money for the first time or for people who have a low credit score or for people who do not have a lot of income. Being a loan guarantor is a responsibility. You have to think before you agree to do it, understanding the risks and the responsibilities of repaying the loan.
If you need to borrow money, Fibe is an option. Fibe offers Online Personal Loans of up to ₹10 lakhs. The process is quick and easy to do. You can also choose to repay the loan over a period of time, up to 36 months. This makes it easier for people to borrow money from Fibe. You can apply easily through the Fibe app or website.
FAQs on Loan Guarantor
What are the risks of being a loan guarantor?
Some major risks include:
Repayment liability if the borrower defaults
Negative impact on the guarantor’s credit score
Reduced eligibility for future loans
Possible legal action from lenders
Long-term financial responsibility until the loan closes
Can a guarantor be removed from a loan?
Generally, guarantors cannot be removed easily once the loan agreement is signed. However, some lenders may allow replacement or removal after reviewing the borrower’s repayment history and updated financial profile.
What is the RBI rule on guarantors?
The RBI allows lenders to frame their own guarantor eligibility policies. Financial institutions typically assess:
Income stability
Creditworthiness
Employment status
Residential stability
Existing liabilities
What is the minimum credit score required to be a personal loan guarantor?
Most lenders prefer a guarantor with a CIBIL score of 700 or above. A higher credit score improves approval chances and may help borrowers secure better loan terms.
Can a self-employed person be a guarantor for a personal loan?
Yes, self-employed individuals can become guarantors if they have stable income, strong financial records, and a good repayment history. Lenders may ask for ITRs, bank statements, and business proof for verification.
What happens to a guarantor if the borrower defaults?
If the borrower defaults, the guarantor becomes legally responsible for repaying the outstanding loan amount, including interest and penalties. The default may also negatively impact the guarantor’s credit score and future borrowing ability.
When opting out of the old tax regime, you may have many doubts, like ‘Is standard deduction applicable in the new tax regime?’ While the Interim Budget of 2024 did not propose any changes to taxation, the 2023 Union Budget eliminated multiple exemptions under the new tax regime.
However, there are certain deductions and exemptions you can still enjoy if you opt for this scheme. Read on to know more.
What is the New Tax Regime?
Before diving into the deductions, here’s a brief overview of the regime:
The new tax regime with concessional tax rates was introduced in the Union Budget 2020
Those who opt for this tax regime cannot claim various tax deductions available in the older regime
In this regime, the Government hiked the basic exemption limit from ₹2.5 to ₹3 lakhs
The annual income limit for tax rebate was also raised from ₹5 lakhs to ₹7 lakhs
Are you wondering which deductions are allowed in the new tax regime? Here’s an overview:
Salaried individuals can claim up to ₹50,000 as standard deduction under Section 80TTB
Exemption of up to ₹7.5 lakhs on employer’s contribution in PF, NPS and other such accounts
You can withdraw 60% of your NPS account corpus without paying any taxes
Partial withdrawal of up to 25% from the self-contribution of your NPS account is tax-free
Family pensioners can avail of a standard deduction of 1/3rd of pension or ₹15,000, whichever is lower
The interest earned on PPF is also tax-free, up to 9.5% if it is a recognised provident fund
You can enjoy exemptions of up to ₹20 lakhs received as gratuity
The amount received at maturity of life insurance plans is exempt if the premium doesn’t exceed ₹5 lakhs
Funds received through voluntary retirement and leave encashment will be tax-free
Exemptions on travel and conveyance allowances
Contributions to Anginveer Corpus Fund u/s 80CCH are eligible for deduction
Interest on a home loan for a let-out property can be claimed as a deduction
When deciding between the new and old regimes, calculate your tax liability for both. This will allow you to choose the best one and get maximum tax benefits. If you are going for the new regime, remember to choose yes under the “Are you opting for the new tax regime u/s 115BAC?” question asked at the time of return filing.
If you need funds, whether to meet your tax liabilities or other obligations, you can rely on Fibe. You can get an Instant Personal Loan of up to ₹5 lakhs at affordable rates within minutes. Download the Fibe Personal Loan App or register on the website to get started.
FAQs on Deductions Allowed Under the New Tax Regime
Are any deductions allowed in the new tax regime?
The number of deductions you can claim under the new tax regime is less than that of the older regime. That said, there are several deductions you can enjoy in the new regime, such as:
Standard deduction of up to ₹50,000
Interest on a home loan for a let-out property
Family pension received (₹50,000 or 1/3rd, whichever is lower)
Amount paid or deposited in the Agniveer Corpus Fund
What is the professional tax deduction allowed in the new tax regime?
No, it isn’t applicable. However, you can claim up to ₹2,400 under the old tax regime.
Which is better, the old or new tax regime?
Consider the following factors when deciding between two tax regimes:
The New Tax Regime will be beneficial if your total deductions are less than ₹1.5 lakhs
If your total deductions range between ₹1.5 lakhs and ₹3.75 lakhs, either of these two regimes will be favourable based on your income level
In case the total deductions exceed ₹3.75 lakhs, choosing the older regime will be more lucrative
Calculate tax liabilities under both regimes and choose accordingly
What are the tax benefits of the new tax regime?
If you are wondering what deductions are allowed in the new tax regime, here’s a brief overview:
Standard deduction of ₹50,000
Transport and conveyance allowance
Gratuity, leave encashment and voluntary retirement
To understand taxation in India, you need to know what is a direct tax and an indirect tax. Here are a few essential points:
You need to pay direct tax to the government based on the income or profits you earn
Contrary to this, you’ll pay indirect tax only if you purchase any good or service
To know more about them, read on.
What is a Direct Tax?
Here are some specifications for better clarity:
It is a tax that you need to pay directly to the authority imposing it
It means that taxpayers need to bear this tax and can’t transfer it to another tax-paying entity
CBDT (Central Board of Direct Taxes) manages the collection and administration of these taxes
The CBDT functions under the Department of Revenue of the Ministry of Finance
Types of Direct Taxes in India
Here’s a list of different categories:
Income Tax
The following are some of its features:
It is the most common type of direct tax that you need to pay directly to the government
The government levies this tax on the income generated by an individual in a financial year
You need to pay this tax based on the income tax slabs you fall under
Capital Gains Tax
Here’s a brief overview:
The government charges this tax on the profits made by investors on certain instruments
Based on the duration of investment, there are two types of these taxes- short-term capital gains (STCG) and long-term capital gains (LTCG)
Securities Transaction Tax
Here are some of the specifications:
You need to pay this tax when you trade in securities
Note that this tax is levied irrespective of whether you made gains or not
Now that you’re aware of how many types of direct taxes are there in India, you’ll be able to understand the Indian taxation system better.
What is the Difference Between Direct and Indirect Tax?
Now that you have understood what is the meaning of direct taxes, check the following table to understand how it differs from indirect taxes:
Parameter
Direct Taxes
Indirect Tax
Applicability
Charged directly on income and profits
Levied indirectly on the sale of goods and services
Tax Payment
Individuals and businesses need to pay these taxes
End-users of goods and services need to pay indirect taxes
Tax Rate
Based on the slab you fall under or the amount of profit and duration of investment
Depends on the applicable GST rate for the goods and services or notified rates for other types of indirect taxes
Transferability
You can’t pass it on to any other tax-paying entity
This tax is transferred to the end-user of the goods or services
Nature of Taxation
It is a progressive type of taxation
It is a regressive type of taxation
Examples
Income Tax, Capital Gains Tax and Securities Transaction Tax (STT)
GST, Excise Duty and Value-Added Tax (VAT)
While personal loans don’t come with any tax benefit, you can avail of certain deductions on your taxable income if you use the funds for certain purposes. These include renovation of your residence, education and more. To avail of these tax benefits, you can get an Instant Personal Loan of up to ₹5 lakhs on Fibe. Download the Fibe Personal Loan App to get a loan with minimal paperwork at affordable interest rates.
FAQs on Direct Tax
What is meant by direct tax?
Here is what is meant by a direct tax:
It is a type of tax that you need to pay directly to the competent authority
You can’t pass it on to another tax-paying entity
What are the different types of taxes?
Here are the two major bifurcations and how they differ from each other:
Direct tax: The government levies this on the taxpayer’s income and profits
Indirect tax: This is charged on goods and services
Which type of tax is a direct tax?
Check out the following specifications:
The impact and incidence of this type of tax fall on the same entity
The taxpayer can’t pass it on to another tax-paying entity
Examples of direct taxes include income tax and capital gains tax
Is GST a direct tax?
No, it is an indirect tax. Here’s what you need to know about the Goods and Services tax:
This is a unified system introduced by the Indian government to replace multiple indirect taxes regulated by state and central government
The GST rates for various products are pegged at 0%, 5%, 12%, 18% and 28%.
An instalment loan is the most common type of credit that banks and NBFCs offer. Once you borrow a required sum, you need to repay the amount along with interest in affordable instalments within a specific timeline.
You can use the borrowed amount for the following purposes:
To pay educational expenses
To clear hospital bills
To finance a vehicle
To purchase a property
Read on to know more about this financial tool and its benefits.
Instalment Loan Meaning
Check out some important points about this form of credit:
The borrowed sum attracts interest, which you must also pay as the equated monthly instalment or EMI
You can avoid paying the amount as a lump sum
Pay the borrowed amount for a predetermined period, called a loan term, which may range from a few months to a year
The lender will close your loan account once you repay the entire outstanding amount
Types of Instalment Loans
Instalment loans are classified into two types:
Secured Loans
You need to pledge your valuable assets as collateral
In the case of default on repayment, lenders can rightfully sell or auction your pledged assets to recover the loan amount
Examples of secured loans include gold and home loans
Unsecured Loans
In this form of credit, there’s no need to pledge collateral
The borrowing costs may be higher, as there is a risk of default for the lender
Examples of unsecured loans include personal and student loans
Instalment Loan Example
Some additional examples include:
Auto Loan: This secured instalment loan allows you to buy a new or used car by pledging the vehicle as collateral, typically for a tenure ranging between 2 and 7 years
Buy Now, Pay Later Facility: This short-term, unsecured loan makes shopping easy by providing interest-free credit
Payday Loan: This is a short-term, high-cost, personal loan which helps you meet emergency financial needs
Student Loan: This is a type of credit that allows you to finance your education and other related expenses
Pros and Cons of Instalment Loans
Here are some benefits of these forms of credit:
It helps you avoid lump sum payment
It allows you to manage a monthly budget with a fixed instalment amount
It enables you to build a good credit score for future loans
You can decide on a suitable tenure as per your repayment capacity
Taking an instalment loan online allows you to get instant approval
Allows you to cover all your major life expenses
While it is a good option, you must also consider its drawbacks, which are as follows.
For a secured type of loan, your asset is at risk for the chosen tenure
Some lenders may have stringent approval criteria
There may be additional charges involved, which can increase your borrowing costs
based on these facts, you can decide whether or not you should opt for an instalment loan. Compare interest rates and other terms before selecting a lender. One such NBFC offering affordable loan terms is Fibe. With our Instant Personal Loan, you can borrow up to ₹5 lakhs hassle-free from the convenience of your home.
You can choose a flexible tenure of up to 36 months and get the loan amount transferred to your account within 10 minutes after approval. This way, you can manage your instalment loan payments effortlessly. Download our Personal Loan App or visit our website to get started!
FAQs on Instalment Loans
How do instalment loans work?
Say you have applied for instalment loans online and received approval from the lender
The amount will be credited to your bank account
You must pay a fixed monthly instalment, including the interest and the principal amount, to the lender across a chosen timeline
The loan account gets closed once you clear the outstanding
What are the types of instalment loans?
Secured loans when you pledge your collateral
Unsecured loans when there’s no need to pledge your assets
What is an example of an instalment loan?
All loans for which you pay EMIs across a fixed timeline are instalment loans. They include:
Wondering, ‘Can I get a personal loan without ITR? Yes. Most lenders require self-employed applicants to submit their income tax returns to review their income and repayment capacity. However, some use alternative methods for this assessment, making loans accessible even when you don’t have your tax filing records.
Read on to learn how to get a loan without ITR.
Tips to Get a Personal Loan Without ITR
Here are some ways to get the funds without submitting your income tax documents:
Provide Other Income Proof Documents
Since lenders require tax returns to gauge your income, you can provide other documents as income proof. These include:
Your bank statements
Your rental income
Your income from investments
Search for Suitable Lenders
As mentioned, several lenders, like Fibe, offer a loan without ITR documents. They use alternate methods to assess the borrower’s income and repayment ability. This information is generally available on their websites. So, do your research and apply accordingly.
Pay Your Dues on Time
Having a solid repayment record also helps you get a loan without submitting ITR documents. It shows a stable income and good repayment behaviour, so lenders easily approve your loan. You can try the following strategies to ensure timely payments:
Keep reminders
Set up autopay
Opt for reminders and alerts from lenders
Check statements and due dates regularly
Get a Secured Loan
While ITR is required for a personal loan, which is unsecured, it may not be necessary when you apply for collateral-backed funding. This is because they can liquidate your assets to recover the outstanding amount if you default. Various types of collateral that you can offer include:
Gold
Real estate
Investments
Antiques
Negotiate with the Lender
You can also talk to various lenders and communicate the non-availability of your tax return documents. This will help you figure out alternate ways that can get you the required funding.
Improve Your Creditworthiness
Having a high credit score helps increase the chances of approval since it represents:
Good repayment history
Experience with credit
Stable source of income
Lenders consider you a safe borrower this way and approve your application even if you don’t provide your ITR documents. You can maintain a good credit score by following these tips:
Clear your credit card and loan EMIs on time
Keep your credit utilisation ratio low
Maintain a healthy credit mix
Check your credit report regularly for errors
Avoid applying for multiple loans simultaneously
Eligibility Criteria for a Personal Loan
Here are the general requirements you need to meet:
Proof of Indian citizenship or residency
A stable source of income
A minimum credit score of 650
Self-employed individuals must be between 21 and 60 years
A minimum work experience of 2 years in the industry
Document Requirements for a Personal Loan
Here is a general overview of the paperwork you need to submit:
Identity Proof: Passport, Aadhaar Card, Voter ID card or Driving licence
Address Proof: Passport, Aadhaar Card, Voter ID card or Driving licence
Income proof: Bank statement of the last 3 months or Salary slips of the last 3 months
With this information, you can manage your personal loan application and increase your chances of getting a loan without ITR. You can get an Instant Personal Loan from Fibe easily since we ask self-employed individuals to submit alternate documents for eligibility checks.
At Fibe, you can get funds with a simple online application and minimal documentation at affordable interest rates. Download the Personal Loan App or log in to our website today and meet your financial needs with ease.
FAQs on Personal Loan Without ITR
Can we apply for a personal loan without ITR?
Yes, you can get funds even if you don’t have your tax returns. Here are some tips:
Apply for a secured loan
Offer other income proof documents
Clear your dues on time
Apply with a suitable lender
Increase your credit score
Negotiate with the lender
Can I get a loan if I don’t pay income tax?
Yes, you can get a personal loan without ITR documents. However, note that paying tax, if applicable, is mandatory and failure to do that can lead to penalties, imprisonment or both.
Which loan is tax free?
In India, you can claim tax benefits and deductions on the following types of loans:
RBI guidelines are in place to ensure loan recovery is handled fairly and with respect. Lenders and recovery agents are not allowed to threaten, pressure or harass you while following up on unpaid loans.
These rules also protect borrower privacy. Recovery agents cannot discuss loan details with family members, friends, neighbours or colleagues. They must carry proper identification and can contact borrowers only during permitted hours, usually between 7 AM and 7 PM. If a meeting is required, the borrower has the right to decide the place. Lenders are also required to share clear account details, explain outstanding dues and offer options such as settlement or grievance redressal wherever applicable.
To know more about this concept, read on.
When is a Loan Categorised as NPA (Non-performing Asset)?
A non-performing asset simply means a debt, the principal and interest of which has not been paid in the last 90 days. The government has devised the following loan recovery techniques for NPAs:
Debarred the banks from providing additional facilities to wilful defaulters
Increased the jurisdiction of Debt Recovery Tribunals (DBTs) to help them focus on high-value cases
Fundamentally changed the borrower and lender relationship with the Insolvency and Bankruptcy Code (IBC)
Infusion of capital in PSBs (Public Sector Banks) to raise the coverage ratio, allowing them to make decisions on constrained accounts without affecting their profitability
Loan Recovery Process
The loan recovery process usually starts when you miss a few EMIs. The lender first contacts you to inform you about the delay and give you time to pay. If the payment is still not made, you may receive a formal notice along with options like rescheduling or settlement. If the delay continues for longer, authorised recovery agents or legal steps may be used. But all actions must follow RBI guidelines.
RBI Guidelines on Loan Recovery
The RBI has set clear rules to ensure loan recovery is handled in a fair and respectful manner for both secured and unsecured loans.
Notice of default: If you miss repayments, the lender must first issue a formal notice. This notice clearly explains the overdue amount and the next steps before recovery begins.
Fair practices code: Lenders must follow the Fair Practices Code at all times. This ensures transparency, clear communication and fair treatment during the recovery process.
No harassment: Lenders and recovery agents are not allowed to use threats, pressure or abusive behaviour. Recovery must be done respectfully and without intimidation.
Regulated recovery agents: Lenders can appoint recovery agents, but these agents must follow RBI’s Code of Conduct. They must carry valid identification and act within approved guidelines.
Clear settlement process: Lenders should have a structured settlement or repayment resolution process. You must be informed about the available options to resolve your dues.
Right to take action: If you feel your rights have been violated, you can raise a complaint or take legal action. RBI guidelines support borrowers in seeking redressal.
What are the RBI guidelines for loan recovery agents?
The following are some of the norms notified by the Central Bank for the loan recovery agents:
The lenders need to publish details of all debt recovery agents on their official website
The loan recovery agents can’t resort to any intimidation in their efforts to claim the unpaid amount of the loan from borrowers
These agents can’t call the borrowers beyond 8 AM to 7 PM
Before applying for any form of credit, check if a lender adheres to the RBI guidelines for loan recovery. An RBI-registered bank or NBFC generally follows these norms. Hence, you can get an Instant Personal Loan of up to ₹10 lakhs on Fibe, which is an RBI-registered financial institution with an ISO 27001 certification.
Our 100% digital process ensures quick loan disbursal within 10 minutes. Download the Fibe Personal Loan App to enjoy quick funding with a simple application process and minimal paperwork.
FAQs on the Loan Recovery Process
Can a loan recovery agent come to the home?
Yes, a debt recovery agent can visit a borrower’s home, provided that they follow these RBI guidelines for loan recovery:
If a recovery agent wants to meet, the borrower must decide the place of meeting
They can only contact the borrower between 7 AM and 7 PM and must respect their privacy
They can’t come to a borrower’s home unannounced and they must carry an authorisation letter for the meeting
How do I stop harassment from loan recovery agents?
If the debt recovery agents harass or trouble the borrowers, they can visit a local police station and file a complaint.
How do I take legal action against a recovery agent?
You can take the following legal actions if a recovery agency uses illegal or aggressive tactics to claim the unpaid amount:
You can file a complaint at the local police station against the agent
If you do not get relief, you can also approach a civil court and seek legal assistance
