As per reports from Business Standard, non-food credit in India grew by Rs. 2.44 trillion in FY 2018’s first 10 months alone. Of this total incremental growth, personal loan covered 96%. The absence of collateral requirement and no end-use restriction make these loans popular among both salaried and self-employed individuals.
While salaried individuals can conveniently meet their personal financing requirements with the loan amount, personal loan for self-employed also effectively fulfils a business’s funding needs.
As they are unsecured loans, lenders require you to meet specific eligibility criteria and provide supporting income documents that assure of your creditworthiness and repayment capacity.
However, if a self-employed individual lacks all documents required, a few lenders require him/her to submit minimum income documents to avail the loan. They must, however, meet all other eligibilities needed by the lender.
Self-employed individuals can also avail it as a business loan to meet their professional funding needs. NBFCs like Bajaj Finserv bring business loans of up to Rs. 30 Lakh against minimum eligibility and documentation.
They also come with pre-approved loan offers that further ease the process of availing finance.
Now, check out the eligibility and document requirement to avail a personal loan for self-employed.
Personal loan for self-employed – Eligibility criteria
Meet the basic eligibilities to avail a personal loan for self-employed.
- Age requirement – Between 25 and 55 years
- Business vintage – A minimum of 3 years
- Income tax return filing – Required for past one year
Additionally, a self-employed individual must also be able to classify himself/herself under one of the following profiles.
- Self-employed (Non-professional): Should be anyone from the manufacturers, traders, proprietors, service providers, retailers, etc.
- Self-employed (Professional): Chartered accountants, company secretaries, architects, allopathic doctors, engineers and other professionals in practice.
Other entities like LLPs, Pvt. Ltd. companies, partnerships, other closely help Limited companies can also avail a business loan for their business requirements like to purchase machinery, introduce funds for working capital, etc.
SMEs (SME full form – Small and Medium Size Enterprises) registered under MSME can also avail these loans to meet their business’s funding needs. Lenders also consider Other business profiles based on specific cases.
Personal loan for self-employed – Documents required:
The essential documents required to avail a business or personal loan for self-employed are as follows –
- Identity proof such as PAN card, Aadhaar card, Voter ID card, Driving License, etc.
- Address proof like Aadhaar Card, Voter ID card, Ration card, Utility bills, etc.
- Proof of business vintage and CoP (for practising professionals)
- Financial documents like P&L statement, Balance Sheet, etc.
- Statement of bank account
- Income Tax return for one year
You can avail the loan by merely submitting these documents. Now that you know the eligibilities to meet and document requirement, check out the applicable interest rate and charges on a personal loan for self-employed.
Interest rates and charges:
The interest rates and charges may vary from one lender to another. Here is an indicative list of charges applicable to the best lenders.
- Interest rates – It can range between 15% and 20% depending on the lender.
- Processing fees – Up to 2% on the loan amount
- Bounce charges – Rs. 3,000 (Maximum)
- Penal interest – Up to 2% on EMI
Applicable fees for part-prepayment and foreclosure facility are nil if the borrower is an individual availing the loan at a floating rate of interest.
Make sure to check the interest rate applicable with your chosen lender before applying. Also, check EMIs payable with the help of EMI calculator to estimate your fixed monthly outgo. Meet your diverse expenses, both personal and professional, like managing international business travel expenses with this loan amount and repay with ease.
