For the longest time, self-employed people faced disappointment owing to multiple loan rejections. Most banks and other financial institutes think before offering Personal Loans to these individuals due to lack of fixed monthly income. However, today times are changing, with many youngsters opting for freelancing and entrepreneur positions. Lenders offer loans to the self-employed with minimum income proofs too.
These loans also get passed with minimum documentation if you pass the Personal Loan eligibility and hold a decent credit score. Here is how to start the application process:
Lenders nowadays provide Personal Loans for self-employed, but it is in your interest to check the potential ones before choosing an appropriate lender. As compared to NBFCs, banks offer the lowest Personal Loan interest rates. With simple research, you find the top lenders around you or even the country offering the loan type you want and comparing the rates.
Decide the loan tenure
Once you have short-listed the lender, decide the tenure. Personal Loans are accessible for tenures up to five years. Most independent professionals tend to opt for higher loan terms but doing so increases the interest rates. Meanwhile, opting for short tenures helps lower the interest rates and increases the equated monthly instalments. It is best to go for a balanced duration like two to three years to benefit from pocket friendly EMIs at affordable rates.
Familiarise with documentation
For assisting lenders in sanctioning your loans instantly and the amount disbursed within hours, the eligibility for Personal Loan also includes relevant documents. Some lenders offer independent professionals’ loans without documents. They ask for your details and credit ratings from which they understand your credit history and repayment behaviour.
Submit documents listed
Personal Loan documents go a long way in speeding the entire loan disbursal and helps negotiate the Personal Loan interest rates. While most lenders consider that you are self-employed and might not have all income proofs, they check other papers like bank statements, income tax returns, rental income proof, and more to decide your repayment capacity. They also need your PAN Card and Aadhaar.
Whether it is Personal Loans for the self-employed or salaried, lenders apply for Personal Loan online. Download the application form according to the category you fit. But before that, use the Personal Loan eligibility calculator to check the amount you can apply for. Once filled in the application, upload the listed documents. Sometimes, lenders send their representatives to collect them.