If you are self-employed and want a personal loan to help you start a business or grow the one you already have, you should look into personal loans for self-employed people. Personal loans have proved to help in any monetary situation.
It is crucial to check the interest rates and qualifying criteria for an instant loan before you apply. Your credit score, age, loan amount, and ability to pay it back are all key factors in the loan process. Read on to learn about credit scores and how to repay your debts.
Features of a Personal Loan for Self-Employed Individuals
Here are the benefits and features of personal loans for self-employed individuals:
- 100% seamless process
- Friendly interest rates
- Flexible loan repayment tenure
- Multiple simple loan amount repayment options
- If the person is pre-approved by the bank, you’ll get instant money
Personal Loan Eligibility for Self-Employed People
Here are the personal loan criteria for self-employed persons.
- For a personal loan, you must be self-employed or salaried.
- A self-employed person needs a credit score of 750 or higher to get a personal loan.
- Your company’s yearly amount must meet the bank’s criteria.
- Your business must have been taxed for at least two years.
- The least you can be is 21 years old, and the most you can be is 60.
Interest Rates for a Personal Loan for Self-Employed Individuals
The interest rate is the amount the lender adds to the borrower’s principal amount. It is defined in the form of a percentage.
The minimum interest rate on a personal loan for self-employed people starts at 10.25% per year. Depending on your credit score, it can change by up to 24%.
Documents Required for a Personal Loan Application
Personal loans for self-employed people require identity and business proof. Here is the list of the needed documents:
- ID Proof such as Aadhar Card, Passport, PAN Card, Voter ID Card, and Driving License.
- Address Proof such as a Ration card, phone bill, electricity bill, PAN Card, Aadhar Card, and Voter ID Card.
- Income Proof such as income tax return of 2 years and P/L account.
- Business Proof like Certification of Registration, Incorporation, and license
- 2 passport-size photos.
- Any other document required by the lender.
You must fill out the bank form to apply for the loan. Then, attach the documents mentioned above.
Important Factors of Personal Loans
The business must be stable for a minimum of 2 years with profit. It will help you get a personal loan at a low-interest rate.
Credit score means your ability to repay the loan amount, also called CIBIL score. If your credit score is above 750, then you become eligible for a low-interest instant personal loan.
Bank & Customer Relationship
If you have an account in the same bank and a regular loan repayment history, the bank will easily offer personal loans for self-employed persons.
Choose a loan with a low-interest rate. Always compare the rates offered by various lenders. Remember always to check the terms and conditions. Doing this will be helpful in the long run.
You can repay your loan amount in multiple ways. EMIs (Equated Monthly Instalments) are a popular method. They will help you pay back the loan in small intervals.
How Do You Apply For a Personal Loan as a Self-Employed Individual?
You can follow the simple steps listed below to apply for an instant personal loan.
- Visit the lender’s website.
- Check your eligibility.
- Apply online.
- Wait for the lender to contact you and complete the process.
You can also go to the bank. You will be given a form to fill out. Submit the required paperwork. Then, your request will be looked at. After checking all the details, someone from the bank will contact you.
Factors Affecting Interest Rates of Personal Loans for a Self-Employed Person
You can get a lower interest rate on an online loan by following some steps. Here are some ideas:
Getting a Better Credit Score
High credit scores show that you are reliable. Personal loan rates will be lower for people who have good credit. Check your credit score before you apply for a personal loan online.
Pay Back Loans
If you pay your bills on time, it helps your credit score. The interest rates on personal loans are based on how well you’ve paid back past loans. People whose EMIs and credit card bills have been paid on time may get a lower interest rate.
Banks and credit unions offer holiday interest rates for a limited time. When these deals are available, you might get a lower interest rate.
Business stability can get you a low-interest personal loan if your business has been doing well for the past two years.
If you have a bank account or a loan you’ve been paying off, you can get a personal loan with a lower interest rate.
How to Build Your Credit Score Quickly?
Your credit score is a vital aspect. It helps in getting low-interest personal loans for self-employed people. You can increase your credit score in simple ways. These are:
- Keep track of your bills and pay them on time.
- Pay off credit card debt on time. You should also keep your credit use low.
- Monitor your credit score every couple of months.
- Bring up any issues with your credit score to the credit bureau.
- Don’t apply for a new credit card and maintain the old one.
- Avoid applying for multiple loans at the same time.
A credit score above 750 can help to get a low-interest personal loan for self-employed people. You can choose from multiple options for repayment.
Make sure you have all the required documents. Fill out the instant personal loan form properly.
Keeping a good relationship with the bank can get you a quick loan amount.
Visit Piramal Finance for similar blogs and take a look at the products and services they offer.