Personal Loan for Self Employed243609 views
Quotes from 18 banks | Instant Approval | Maximum Loan Eligibility
Table of Contents
- 1 Personal Loan for Self Employed with No Income Proof
- 2 Personal Loan for Self Employed
- 3 Difference between Taking the Personal Loan from Banks and NBFCs for Self Employed
Personal Loan for Self Employed with No Income Proof
Yes, it is possible for a self-employed to avail a personal loan without income proof. I am sure, now you must be curious to know how? So, let me tell you that though income proof is important as far as availing a loan is concerned, but in some cases, a loan can also be given to self-employed individuals if they fail to submit the proof. In that case, the lenders usually offer the secured personal loan to the applicants by mortgaging their property documents. A borrower needs to submit his/her property documents to the lender so as to get the funds instantly via a secured personal loan. However, maintaining good relations with a lender can also be helpful here and allows a borrower to get a personal loan at lower interest rates.
Take a look below to know which banks offer a personal loan to self-employed with no income proof:
HDFC Bank: A self-employed individual needs to have 3-4 years of business stability and an operational current account with HDFC to avail the loan without an income proof.
Fullerton India: The Self-employed individuals need to have a current account with the lender and also he needs to show 3 years of ITR to avail the loan.
Personal Loan for Self Employed
If a self-employed is carrying an income proof, it is going to be a smooth loan journey for him/her. Before offering a loan to the borrowers, the lenders do check the documents and income proof is something on which they always keep an eye. So, submitting the same along with all the required documents allows a self-employed applicant to avail the loan without any hassle. However, one can also negotiate for the attractive personal loan rates and minimized charges so as to grab the best deal from a lender.
When it comes to self-employed borrowers, these are those individuals who own the unincorporated business by themselves. They are the sole owner of the business. However, many people think that it might be difficult for self-employed individuals to get the personal loan because of the fact that they are not salaried, but it is absolutely not the case. Just like any other salaried employee, a self-employed can also avail a personal loan easily.
Personal Loan Eligibility for Self Employed
The eligibility required differs from bank to bank and the given below is the general eligibility criteria that are required for the sanction of the personal loan:
- The applicant should be Resident of India.
- The applicant should have the minimum age of 24 years at the time of application, the maximum age should be 65 years at the time of loan maturity.
- The minimum turnover or profit of the applicant should be as per lender’s requirements.
- The minimum work experience in the current business for at least 3 years.
- The minimum annual turnover should be Rs.1 Lakh
Rate of Interest that Will be Charged on Personal Loan for Self Employed
The interest rate varies from bank to bank. And usually, it varies from 10.99%-25% depending upon your profile and the policies/scheme you opt for. In fact, an individual must fulfill the eligibility criteria, before availing the personal loan at this interest rate. If the profile of the candidate suits the bank, and the candidate maintains a good relation, he/she can even negotiate for a better interest rate. Moreover, depending upon the profile of the candidate, different lenders charge the different rate of interest from self-employed. So, before availing the personal loan, it is important to check the rate of interest with the bank.
Take a look at the table below to know the interest rates being offered by various lenders:
|Banks||Interest Rates (in per annum)|
|Bajaj Finserv||10.99% - 16.00%|
*Interest Rates: Different banks offer a different rate of interest so it is highly important to compare different banks before you apply.
How to Apply Personal Loan for Self Employed?
You have all the options available for the application of the personal loan. You can opt to fill the application through online as well as offline method. The different process through which you can fill the application are:
- Online Application: You simply need to visit the website of the bank and by providing your personal information can easily apply for the loan. Apart from this, you can also apply through Internet Banking with the help of using your login ID and credentials.
- Visit the Branch: Pay a visit to the bank branch with all the required documents and submit the same to get the loan.
- Over the Phone: Get in touch with the customer care executives to get the loan.
The documents required by the lender, in general, are mentioned below. The documents should be authentic and legal.
- The duly signed application form.
- Passport size photograph.
- Proof of ID – Passport/ Voter ID/ PAN Card
- Proof of age – Birth certificate/ passport
- Proof of residence – Passport/ Utility bill/ Allotment letter.
- Proof of income – Latest Income tax return (ITR) along with computation of income, Last 2 years Balance sheet and profit and loss certified by a CA.
- Proof of Signature verification- Passport/ PAN Card.
- Bank statement – Last 3 months bank statement/ last 6 months bank passbook.
For most of the lenders, these are must documents that are must be submitted for the approval of the personal loan. The loan can be used for almost all the purposes where the requirement of reason is not necessary. It is an all-purpose solution with its own drawbacks. It is a high-interest loan product as compared to others. So, you should be careful while availing one for yourself. You should shop around a bit before choosing the lender. Though with no income proof documents you have restricted the number of lenders still you should thoroughly check with all the lenders and select the one which has optimum benefits.
Personal Loan for Self Employed with Bad Credit
When it comes to applying for personal loan, always remember that the bad credit history can minimize your chances of getting a good loan. But, even if you are suffering from bad credit, it is possible for you to get the personal loan. For self-employed, it is easy to avail the personal loan with bad credit history through secured personal loans. As far as secured loans are concerned, banks don’t require a good credit history because they can now the access to the collateral on which they can rely on. Thus, it’s a win-win situation for both the borrower and the lender.
Difference between Taking the Personal Loan from Banks and NBFCs for Self Employed
These days, many leading banks and Non-Financial Banking Companies provide unmatched and flexible personal loan to all the self-employed individuals. But before taking the loan, it is important for you to know the difference between both the lenders. The actual difference between both the lenders is the fact that banks have stringent rules and regulations, and some banks offer loan to such individuals who have a good credit record. While on the other hand NBFCs are more lenient with their terms in providing the personal loan. But, as compared to banks NBFCs have a higher rate of interest.
What are the Reasons to Take Personal Loan?
- Credit Card Dues
- Emergencies like Hospital Expenses
- Marriage Expenses
- Margin money for the Home
- Home Renovation
- Travel Expenditure
Factors Affecting Self Employed Personal Loan Rates
- Annual Income Tax Return- If your income is high and you are a large company you can expect rates to be lower for you.
- Type of Business- Banks are ready to give lower rates to sound business. So, all Manufacturing and sound business professionals get a better rate of Interest on the personal loan.
- Special Rates to Self- Employed Professionals- Banks really likely to fund Doctors/Engineers/CA and Architects. Banks believe these set of customers very rarely default and hence there rates are better from others.
Things to Look in Personal Loan with Different Banks for Self-Employed
- Rate of Interest- Always compare the rate of interest offered by different banks to fulfill your personal needs.
- Monthly EMI- Next thing that you should keep in mind is the monthly EMI of different banks. Compare the monthly EMI of different banks for the same loan amount.
- Time Taken for Approval-Usually within two or three working days one can get the loan approval. But you are advised to check how fast a bank can process your request for loan.
- Turnaround Time-Check and compare how much time a bank takes for processing and disbursal time? Different banks have different disburse period, so check thoroughly.
- Processing Fee-It is a one- time fee that you need to give in a bank. Always compare which bank offers the lowest fee. Usually, the processing charges range between 1.50%-2%.
- Prepayment Charges-It is important to check for the prepayment charges. Usually, some banks charge you with the prepayment fee, so you need to be careful here.
- Loan Tenure-It is important to look for the tenure offered by different banks. Depending upon your choice, you can select the tenure, but compare first.
Features and Benefits of Personal Loan for Self Employed
- Competitive interest rates
- No collateral
- Quick processing of the loan
- Easy EMIs
- Flexible tenure periods
- The loan amount depends on the repayment capacity of the individual
- The loan amount can be used for any personal expenditures
HDFC Personal Loan for Self Employed
If you are self-employed, you have a reason to smile as HDFC offers personal loan to self-employed. The bank offers the instant credit facility to meet the personal needs of the applicants. Yes, right from paying the credit card debt, traveling to an exotic location to renovating the home, a personal loan comes handy to fulfill all your needs in the best way. Currently, the bank is offering a loan at an interest rate of 11.25% for 5 years with ₹25 Lakh being the maximum loan amount offered by the bank.