A Brief Guide on a Personal Loan for Self-Employed Individuals

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Self-employed individuals bear a lot of risk in terms of financial and managerial aspects. Through self-employment, individuals not only empower themselves financially but also help in creating job opportunities for several other individuals. 

Bearing financial risks might be an extremely challenging task. Personal loan for self-employed individuals is, thus, a medium through which they avail some financial assistance. 

This fund can be utilised to meet multiple expenses including medical, travel, wedding, home renovation, business, and so on.

It is often assumed that personal loans are offered to employed or salaried individuals. However, there are select financial institutions that extend personal loans to self-employed individuals. 

For such individuals who are in need of funds, selecting the ideal lender is also a vital task. This is where the must-have financial skills of a business owner come into play. 

Availing a personal loan or business loan is a financial commitment too. If not planned and tackled responsibly, it can lead to a default. 

Hence, it becomes extremely important for a self-employed individual to make an informed decision while availing a loan.

Features included in personal loan for self-employed individuals

The features of a personal loan offered to self-employed individuals are likely to vary from one lender to another. Here is a list of features relative to personal loans for self-employed which an individual must take into consideration before applying –

Collateral-free funds

Personal loans for self-employed are collateral-free advances, borrowers have no need to pledge a property or asset as a security to avail the loans.

Easy EMI options

A borrower can easily repay the loan in easy EMIs (Equated Monthly Instalments). Repaying a loan through EMIs is simpler, considering paying in parts is easier as compared to paying a lump sum amount at one point of time.

Substantial sum as principal

A self-employed individual can avail a personal loan for self-employed, i.e. a business loan, of up to Rs.30 lakh from top financiers.

Online access to the loan account

Such leading lenders also offer multiple borrower-friendly add-ons such as dedicated mobile apps and online account management options as well.

Special features

Certain financial companies incorporate various exclusive features to a personal loan for self-employed individuals. These features increase the suitability and convenience of availing loans.

The flexibility of withdrawing funds

Select lenders only offer such features that will allow borrowers to withdraw funds from a pre-sanctioned limit according to their convenience and requirements. 

Bajaj Finserv offers the Flexi Loan feature which additionally allows the borrower to pay interest only on the withdrawn amount and not on the total loan which helps reduce the interest liability.

They also bring a range of pre-approved offers which make the application process simpler and faster. Such offers are also available on personal loans and business loans, as well as on numerous other financial products including. 

The eligibility criteria set by lenders under this loan policy is usually easy to fulfil –

  1. The applicant has to be aged between 22 and 55 years.
  2. He/she has to prove the business existence of a minimum of 3 years.
  3. A decent credit score (usually above 750) of the applicant.

The lender will ask the applicant to submit certain documents to prove his/her eligibility. Personal loan for self-employed applicants are approved only after the details provided by him/her has been verified by the authorities.

While planning to borrow a loan, the self-employed borrower must also keep in mind the different ways in which GST impacts a business. This will ensure he assesses the fund requirements more precisely.