A personal loan proves to be a great borrowing solution primarily because it does not come with any pre-condition on end-use. It allows individuals to utilize the fund to cover any financial shortcoming that may arise. For instance, self-employed individuals can avail the funds to mitigate their business-related expenditures with ease.
Hence, a personal loan for self employed is one of the most accessible credit options that individuals have at their disposal. But, getting hands-on with this credit option may sometimes pose a challenge as borrowers need to fulfill certain lender-specific conditions to acquire it.
Following are some of the ways that will help self-employed individuals raise funds for their business –
1. Meet the eligibility
The eligibility criteria of a personal loan for self-employed individuals vary with different lenders. Therefore, first, you need to know the lender-specific eligibility to avail assured funds. Following are some of the factors that you need to tick off –
· Age of the applicant must be from 25 years to 65 years.
· Credit score should be 750 and above.
· Must have a steady source of income
Along with that, you may also need to fulfill business-specific criteria like a minimum of 3-year business vintage, etc.
2. Decide the loan quantum
Opting for a personal loan for a company is a crucial financial decision that helps grow a business. Nonetheless, business owners need to have a clear idea of how much fund they actually require. It ensures that they are not over-borrowing or under-borrowing, resulting in easy repayment of the debt.
3. Check your repayment capacity
To decide the exact loan amount, individuals first need to estimate their repayment capacity. In this regard, they have to consider all the current liabilities and annual turnover. To facilitate this calculation, self-employed individuals can use an EMI calculator to check monthly installments that go towards the principal and interest payment of a new business loan.
4. Submit all the documents
Lenders approve a personal loan for the self-employed only after checking all the relevant documents. Hence, if business owners have to avail the funds they require, they need to keep the following documents ready –
· Trade license.
· GST certificate.
· KYC of applicant.
· Address proof of the office.
· ITR documents.
· Bank account details of the last 6 months.
Depending on the lender, they may also have to present additional documents required for a business loan to prove their eligibility.
5. Compare different lenders
Almost all lenders offer personal loan for self-employed, and thus, choosing the right one can be challenging. To get the best interest rate and better terms of service, individuals need to compare different lenders.
Top financial institutions like Bajaj Finserv extend a business loan up to Rs.45 lakh against a competitive interest rate. They also offer a Flexi loan facility that lowers the EMI burden substantially.
This NBFC also provides pre-approved offers that simplify and expedite the loan application process. Besides business loans, such offers can be availed on personal loans, credit cards and others. All you have to do is share some basic credentials like name and mobile number to check your pre-approved offer instantly.
- Follow the application process
Another best way to avail a loan for self-employed individuals is to understand the application process. Although it varies for different lenders, you should choose a lender that offers an online business loan. It will allow you to complete the loan application process from the comfort of your home.
Moreover, some lenders also have a dedicated app that you can use to keep a tab on your loan account. It ensures that you do not have to call your lender or visit the branch physically to resolve any query, thus saving time.
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