How Salary Slip Plays an Important Role while Applying for a Credit Card or Personal Loan

How Salary Slip Plays an Important Role while Applying for a Credit Card or Personal Loan

Salary slip or payslip is a legal duly stamped document an employee receives every month from their employer. It contains all the details of the employee’s salary like the income part which consists of HRA, TA, and bonus and so on, and also the deductions made. You will find these components in the Salary Slip Format. Various templates of Salary Slip Format are available online for all the budding employers. 

Now, asking for salary slip from your employer (if they already don’t provide you with them) is very important. You should always have copies of your recent salary slip because they are needed for many reasons like income tax calculation, legal proof of salary, future salary negotiation and also for the application of credit cards and personal loan. In this article, we will talk about the importance of salary slips in the application of a credit card or personal loans.

Importance of Salary Slip for Credit Card Application:

We all know how short-term financial needs can be easily taken care of by credit cards because salary cannot be sufficient always. You could enjoy credit free of interest with credit cards. Interest needs to be paid only when the repayment is not done on time. It gives you ready cash for sudden expenses. Besides, you get reward points, discounts, and cashback and so on. 

Most of us might be very well informed about credit cards and also use them for daily needs like stated. However, there are some aspects of credit cards that we might be quite ignorant about. Banks and financial institutions have come 

When it comes to the role of Salary Slips in the application procedure of credit cards, the bank asks you for your payslips to judge your credibility. The financial institution needs your salary slip so that it can determine how capable you are of paying the credit taken at the end of the month and also whether you would be able to pay within a stipulated period or not.  

You need to provide certain documents for the application procedure which include identity proof, address proof, and income proof is one. Salary slips work as income proof while applying for a credit card. Many banks won’t grant one if you can’t provide your salary slips of the last given period of months. A certain income level and a good credit score are needed while applying for a credit card and that is evaluated from your income proof. 

However, self-employed people wouldn’t have income proof and hence, have other documents to show how much they earn. These include- recent ITR Statement, Passport, and Proof of business continuity. For salaried applicants, the salary slips or employment letter for salary certificate could work as income proof.

The 10 Best Credit Cards in India 2020 are as below:

  • HDFC Diners Club Miles Card
  • Citi Rewards Card
  • HDFC Freedom Card
  • Citi Cashback Card
  • Kotak PVR Gold Credit Card
  • Induslnd Platinum Card
  • IndianOil Citi Platinum Card
  • Induslnd Platinum Aura Edge Card
  • Axis Bank Neo Credit Card
  • HSBC Visa Platinum Credit Card

In the current scenario, individuals who do not possess salary slips can also somewhat avail a credit card. They can do this by availing a credit card issued on fixed deposits. It is also possible if one of the members of the family has a credit card with an option of add-on cards.

Importance of Salary Slip for Application of Personal Loan:

A personal loan is a kind of unsecured loan you could take from a bank or an NBFC to meet your personal needs. This loan is not secured against any asset and needs to be repaid in monthly installments over two to seven years.

Monthly salary slips play a very essential role in deciding the credit limit of your loan. Let us further elaborate on how important salary slips are for the application of personal loans in India

  • Most of the financial institutions and banks have made it mandatory to submit your monthly payslips of the applicant to consider lending a loan. 
  • This step has been taken to assess the individual’s creditworthiness and capability to repay the loan in the stipulated time.
  • Your salary slips will also provide an assurance of repayment from your side to the bank or the financial institution.
  • You need to meet a certain income level to be eligible for the loan, this is also decided by your salary slip.
  • For all salaried individuals, salary slip is mandatory to avail a Personal Loan.

About the Author

Pradeep Garg

Pardeep Garg is an online entrepreneur, motivational speaker, and author. He is passionate about Market Research and loves to write on topics Business, Digital Marketing, Finance, Wealth, Information and Opinions to success in life.