Personal Loans are the unsecured loans, where there are no restrictions on how a person uses the borrowed loan amount. While, the personal loans are available for all the loan seekers, there are some eligibility criteria, which need to fulfill to get the personal loans. Personal loans are considered as one of the easiest loans to borrow and in most cases, these are approved by the banks and other lending agencies. While, there are certain cases, where personal loans come as pre-approved.
When it comes to the eligibility criteria, one important factor in getting an approval for the personal Loan is the job stability, thus denoting that a person needs to be salaried to get a personal loan. So, does that mean that the self employed professionals will not be entertained Personal Loan?
Self Employed Individuals are those who work for their own. They are the ones, who run their own business or work on their own to earn their livelihood. Since, they are the self employed and run their own businesses, there’s always a fluctuation in the earning and nothing as fixed in terms of the amount they will be receiving as the working professionals being employed in firms receive. Thus, it means, as they are not salaried, the self employed find it hard to get a personal loan? That’s not true?
The Self Employed Professionals can also avail Personal Loans, just as easily as the Salaried Professionals can. With no hassles, of course, the self employed professionals can also be granted a personal loan.
The Personal Loans are granted to the salaried, non salaried and self employed. However, the documentation and other criteria may differ based on the profession, and livelihood of a person.
Yes, usually the personal loans granted to the salaried, self employed and non salaried differ with each other. The documentation and the eligibility criteria differ in all the three cases and when it comes to the interest rates, there might be some differences in all the cases, too!
Let’s dive deep into the discussion and take each point, further in detail. All the banks and non financial banking companies offer personal loans to the self employed individuals, quite easily. However, since they are self employed there are some stringent rules and conditions applied to the approval of the personal loans for the self employed. The self employed professionals bearing the high credit score are offered the personal loans, while those who have hard times in their CIBIL Score are abided.
However, when it comes to the options for the Self Employed Professionals, the banks and NBFC’s differ in their approach. The banks have harder rules and regulations, while the NBFCs are the ones who are lenient, and thus NBFCs are considered as one of the easier options for the self employed professionals while approaching for the personal loan and getting an approval.
There is quite an apparent difference in the offering and the way both functions, when it comes to the personal loans.
The Banks always play safe in their court and may disapprove the loan application for the self employed, while there are high chances that you will get an approval for the personal loan through any NBFC.
While, the interest rate for the banks is lower than the NBFCs, the NBFCs charge a higher interest rate as compared to banks, when it comes to the personal loans.
When it comes to the banks, the self employed individuals must carry a good CIBIL Score under their report, the NBFCs might consider approving for the personal loans, even below at pat CIBIL Score.
Having a bad CIBIL Score is never a good thing, if you consider taking a loan of any kind. While, it creates a feeling of uncertainty within the minds of the banking professionals over the approval of any kind of a loan, the chances are that you might end up losing your approval for loan, even if it’s personal loan or a home loan. But, don’t lose heart! There’s still a possibility that the person having a bad credit score can get an approval for the personal loan.
There’s always a door open in our country and when it comes to the personal loans, it’s no exception. Self employed individuals having a bad credit score can opt for the loans through no credit check loans or a secured personal loan. The secured personal loans, as the name suggests is the secured type of personal loan, where you need to put a collateral for the personal loan, you avail. So, what’s the benefit?
Since, you are offering collateral; the chances are high that you end up getting a personal loan in your account.
Since, you are offering collateral at your loan; the banks will not hesitate in approving your personal loan application, at all!
With the timely payment of your EMIs, you end up collecting some good reward points in your credit score, which will help you in getting a personal loan in the future, without putting any collateral!
Below are the Features of a Personal Loan for the Self Employed:
Below are some limitations of a Personal Loan for Self Employed:
While, a lot has been discussed, there are many more in our discussion kitty! When it comes to the self employed, the individuals are divided into 2 categories, which are listed below:
Self Employed Professionals: The banks categories self employed individuals into two categories; one is the self employed professionals, under which the doctors, surgeons, dentists, who are practising from their own clinics along with the Chartered Accountants, Architects, Interior Designers, and Consultants comes.
Self Employed Non Professionals: All rest individuals who don’t come under the Self Employed Professionals come under the list. These may include Self Employed Non Professionals, who are into the manufacturing, services, trading businesses.
While, the eligibility criteria differs banks to banks, and from NBFCs to NBFCs, below is the eligibility criteria needed for the Personal Loans for Self Employed Individuals, generally:
Below are the set of documents required for Personal Loans for Self Employed. However, keep in mind that the Documentation list may differ depending upon the eligibility criteria, as laid down by your lender:
So, if you are ready to take a personal loan, you may be delighted to know that you may spend the loan amount, at whatever, you want to spend on. However, we still recommend you to spend the amount, responsibly, as the amount borrowed is to be paid back to the lender. Also, calculate all your expenses and needs, and only decided to apply for the Personal loan, if there’s no other way. Below is the list of some of the tasks, you may spend your loan amount at:
When it comes to the EMIs for the Personal Loans for the Self Employed, there’s apparently no difference in how Personal Loans for Salaried and Personal Loans for the Self Employed works. The EMI depends on the following factors:
The Personal Loans for the Self Employed are a situation saver in most cases. When it comes to the emergency needs, a person can opt for the Personal Loans from any good and chosen Lender. However, what, every one of us should remember is that the loan of any kind should be availed only when the situation is very urgent and when the things are going out of your hands. The Personal Loans just for the enjoyment and all must be avoided, as every penny you are borrowing from a bank, must be paid back with the interest. Thus, it’s better if you are well prepared before in advance and limit your expenses.
Try to figure out your expenses and savings, and always keep emergency funds with you. Remember that the personal loans are dearer loans and the interest rates on personal loans are towards the higher side. You may avoid taking a personal loan, and instead borrow money from your friends, family and any other support hands. Availing a personal loan should be the last resort! Try restricting taking a personal loan just for the pleasure and to buy things, which are really never needed. Still, if you made up your mind on availing a personal loan, what are you waiting for? Take a step further!
Your credit report is one of the most important factors when it comes to deciding your eligibility for a particular loan.
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