What if there is no salary slip? Small shopkeepers and businessmen can get car loan instantly in these 3 ways.

Often small shopkeepers, gig workers and businessmen have this notion that buying their dream car is a complicated process for them because they do not have monthly salary slips. There is a common misconception in the banking world that car loans are available only for ‘fixed income’ employees. In fact, now the modern banking system has become much more flexible than before.

At present, banks give loans not only by looking at your pay-slip but also by looking at your repayment capacity. If you use the right financial documents and strategy, you can not only get a loan even without a salary slip, but also avail attractive interest rates. Let us know about those 3 effective methods, which can help you get a car loan even without salary slip.

1. Income Tax Return (ITR)

For self-employed individuals, ITR is not just a means of paying tax, but is the most reliable government document of their income. When you do not have monthly salary slip, then banks ask for ITR records of last 2 to 3 years. This document helps the bank understand that your business has been earning profits consistently for some time and your annual income is sufficient to repay the car installments (EMIs).

If you file ITR regularly and your ‘Computation of Income’ sheet is in order, banks consider you a ‘low risk customer’, which not only makes loan approval easier, but you also get the benefit of good interest rates.

2. Banking Transactions and Cash Flow

For a businessman, his bank statement is his balance sheet. In the absence of salary slip, banks analyze the transactions of your current or savings account for the last 6 to 12 months. It mainly focuses on ‘Average Monthly Balance’ (AMB), which shows how much cash is left with you after expenses.

In today’s digital era, transactions through UPI, NEFT and card payments increase the transparency of your business. If money is coming into your account regularly and there is no problem like bounced cheques, then banks can consider your ‘cash flow’ as proof of income and proceed with the loan process.

3. Co-Applicant and Banking Surrogate Scheme

If your personal income is low on paper or you do not have sufficient documents, adding a co-applicant can prove to be a masterstroke. You can include any working member of your family (wife, mother, father or child) in the loan, thereby adding their income to your eligibility and reducing the risk of loan rejection.

Apart from this, many banks give loans under Banking Surrogate Schemes. In this method, instead of your salary slip, banks look at your other financial assets, such as your credit card payment history, your current insurance premium or the timely repayment of installments of any of your previous loans (like home loan or gold loan). This method is best for those people who have a strong banking history but do not have income proof.