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Things You Have to Note When Taking a Personal Loan as a Self Employed Individual

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As a self-employed individual, you may face difficulties when applying for a personal loan from a bank. Banks have strict eligibility criteria in place that may obstruct the path of smooth sanctioning of the loan.

But wait, there is a way!

NBFCs, on the other hand, don’t implement such stringent rules and make it easier to get a personal loan for businessman individuals. These financial institutions can sanction an individual like you with a personal loan within minutes, provided you meet their simple eligibility parameters. Taking such a loan can provide multiple benefits and address your all financial issues.

Things to keep in mind before taking a personal loan:

Before taking a personal loan, you as a self-employed individual should note certain things in mind. These include –

  • Applicant type

Financial institutions offer such loans to following:

  • Any self-employed professional or non-professional.
  • A closely held or privately held limited company.
  • A limited liability partnership (LLP).
  • Partnership

Ensure that you fall under one of the categories mentioned above to apply for the loan.

  • Business vintage

The business vintage is one of the crucial aspects when applying for a personal loan for self employed individuals. Financial institutions require your business to be a minimum of 3 years old.

The more vintage your company has, the more eligible you are for the loan.

Vintage works as an assurance for the NBFC when giving a personal loan to a small business owner.

  • Income Tax Returns

To be eligible for a personal loan as a self-employed individual, your business must have filed income tax returns. NBFCs require you to have filed income tax returns for at least the last 2 years.

What’s the importance of showing income tax filing?

Filing income tax returns vouch for the authenticity and repayment capability of your business.

  • Credit Score

Credit score holds a significant position when getting a personal loan for self employed individuals. As a businessperson, your CIBIL score matters the most to the financial institutions. Moreover, as personal loans are not given against collaterals, your credit score becomes a key factor in determining your eligibility.

  • Interest rates

All reliable and dependable NBFCs give personal loans at attractive interest rates. Moreover, many of them also provide an EMI calculator with which you can get detailed information about the total EMI payable, the total interest, and other such information.  

  • Loan approval and disbursal

In case of emergency, getting the loan sanctioned as quickly as possible becomes a top priority. Hence, it becomes necessary to check the loan approval and disbursal time.

So, what is an ideal disbursal time?

With NBFCs, you can get the loan disbursed within 24 hours and thus will be able to use it to your benefit.

  • Hidden charges  

Read the terms and conditions of the lender properly to ensure they don’t include any additional charges. Most NBFCs state on their website that they don’t implement any hidden fees.

But, it’s still a wise move to go through the T&C once.

Which NBFC should I go for?

NBFCs like Bajaj Finserv have made it possible for self-employed individuals to take a personal loan at ease. With their Flexi Loan facility, you can borrow as much as you want to from your loan account and pay interest only on that. This can reduce EMI considerably by 50% when compared to a term loan.

These were some of the things you should note before applying for a personal loan for self employed individuals.

Opting for a personal loan from reputed financial institutions like Bajaj Finserv is one of the wiser ways of availing the loan. If you are an existing customer, you can even get their pre-approved offers as well.

Know more from their official website and apply online for a loan.

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