Self-employed individuals belong to one of the most important and underrated sections of society which bring in considerable contribution to the country’s economy. However, it is not very comfortable being self-employed as the business climate will not always work in one’s favour. Nevertheless, they would need funds to sustain their business activities. In such scenarios, the lending institutions do come in handy and provide the necessary financial assistance through personal loans but as per their existing terms and conditions. Note that it is easier for a self-employed individual to get personal loans if they can submit income proof. However, you can also avail personal loans without income proof.
PL for the self-employed without income proof:
The financial institutions always find ways to help borrowers with available resources. One of them is a secured loan, i.e. the borrower will be pledging property to the lender by which the borrower can avail a personal loan at a lower rate of interest. Another way is availing a personal loan without pledging any property which will come under an unsecured loan. Here a financial institution has the authority to approve instant personal loans for self-employed with applicable terms and conditions. If you have been maintaining good relations with your existing lender and can submit necessary documents barring income proof, you stand a good chance of getting the loans at a competitive rate of interest.
Rate of interest
The personal loan rates can depend on various factors like the type of financial institution NBFC, the association between lender and borrower, the documentation provided by the borrower. The interest rate also depends on the confidence that a lender has on a borrower. If the NBFC feels that there is a risk factor in the transaction, they might charge a higher rate of interest. Also, one of the most critical factors is to have a better credit score so that the lending institution categorizes your loan as a low-risk transaction.
Eligibility for an instant loan for self-employed
Below are the eligibility criteria for the self-employed :
- Annual profit post taxes
- Existing debts
- Bank statements
- CIBIL score of the borrower
- Age of the borrower
- The lending institutions policies/t&c at the time of loan application
Some of the documents required for a hassle-free application process are signed application form, proof of residence, proof of business, proof of ID, bank statements etc.
Ways to apply for a personal loan for self-employed
You can either visit a NBFC’s physical premises or their website to apply for a personal loan. Every site of the lender would contain an online EMI calculator or any other relevant information that the borrower can use to decide on the NBFC to avail funds.
Things to consider for instant loans for the self-employed
- Loan tenure & monthly EMI
The loan tenure & monthly EMI can vary from one lender to another, but you can customize as per your needs and as per your lender.
- Rate of interest
As mentioned before, the interest rate can depend on the lender, and you need to compare various financial institutions before concluding.
- Processing time
Some NBFCs can take a relatively lesser time to process your loans and hence you can approach them based on the urgency.
- Additional fees
The additional costs would constitute pre-payment and processing charges, and you need to enquire them beforehand.
Availing a personal loan is not a stringent process any more, and the rise of NBFCs are making it more accessible. However, you need to be careful about analyzing various factors & assess different lenders before zeroing in on your financial partner.