Personal Loan for Self Employed

Sometimes, all you need is that little something extra to make life easier. In need of funds to fuel your dreams? Or do you require emergency cash to tide over a temporary crisis? Do you require working capital for your business? Or do you simply require the cash to fund your luxury vacation? Whatever your need be, a personal loan could make your life easier.

A personal loan is a multi-purpose loan – there is no restriction in the way you utilize your loan amount. You can use your Personal Loan for home improvement or renovation, for the perfect holiday, purchase of electronics, to fund your child's education or wedding, as Short Term loan for equipment purchase or working capital for your business, for medical emergency, or any other emergency.

Importance of employment stability and net income

However, typically, in addition to your credit score and your existing loan obligations, your employment and salary play an important role in being approved for a personal loan. Lenders want to be assured that you have steady income from a government or reputed private sector employer that will enable you to make your loan repayments on time every month.

However, if you are self-employed you are also eligible for a personal loan from most lenders though the documentation requirements might be a little different from salaried individuals. So long as you enjoy a good monthly income and have a good debt to income ratio (loan obligations as a percentage of your income), you should have no problem being approved for a personal loan.

Personal loan eligibility for self-employed:

Do note that the eligibility criteria will differ from lender to lender. Following are some general eligibility criteria:

•    Age requirement: At least 25 years of age at the time of loan application and maximum 65 years of age.

•    Minimum Profit After Tax: Rs. 2 lakhs for Proprietorship Firm/Self-employed Individuals and Rs. 1 lac for non-professionals as per latest audited financials  

•    Stability: In current business for at least 2 years

Personal loan documentation required for self-employed:

Following is a typical list of documents that is generally required. Do note that additional documents might be requested for, depending on the lender.

•    Proof of Identity.

•    Proof of age: Birth Certificate etc.

•    Proof of Residence: Lease and Rental Agreement / Utility Bill (not more than 3 months old) / Passport

•    Income proof: Audited financials for the last two years

•    Latest 6 months bank statement.

•    Office address proof.

•    Proof of residence or office ownership.

•    Proof of continuity of business.

General features of a personal loan:

•    Attractive rates of interest – depending on your credit history

•    Flexible tenures ranging from 12 months up to 60 months.

•    Easy loan payment options like Auto-debit / ECS / PDC.

•    Generally, no security, no collateral required

•    Minimal documentation and simplified application procedure

•    Quick processing and direct credit of funds

•    Instant personal loans available with leading banks

•    Facility to apply online with most lenders

Personal loan for self-employed – how to apply?

You can apply for a Personal Loan in the following ways:

•    Apply online on the lender's website from the convenience of your home.

•    Send an e mail to the customer care center, or call the customer care center

•    Visit the Help Desk at the lender's branch.

•    Apply through a direct sales agent

Being self-employed is no barrier to getting a personal loan. You need to have a good income, solid credit score and complete documentation in order to qualify for a loan.