Personal Loans

Personal Finance Loans for Self Employed

5 min read

Banks and financial institutions are in the business of lending money to businesses and individuals. With the opening up of financial markets, there are many more opportunities for people to get access to finances than ever before. Self employed professionals are also eligible to get personal finance loans for Self Employed in India. If you are a self employed professional and looking to get bank lending, the first step is to get educated before applying for a loan with a finance company. It is fairly easy for salaried professionals to get a loan in India, but when it comes to self employed people, the eligibility factors are entirely different and even the interest rate can be different.

As a self employed professional eligible to apply for a loan in India, one will need to be prepared to pay back the personal finance loans for Self Employed along with the interest rates on personal loans to the banks. Use our personal loan calculator to figure out monthly installments that will need to be paid one can consider and apply for any kind of bank lending. One has to keep in mind that there is always a huge demand for loans and interest rates will fluctuate based on market movement. It is sensible to plan in advance and decide one’s requirements and then choose the best and cheapest interest rate for your loan in India.

The eligibility factors that should be and are checked before one can apply for a bank loan in India are as follows:

  • Age
  • Income
  • Residence Type
  • Business Continuity

Age

Self employed professionals should be at least 24 years old and maximum of 65 years at the time of loan maturity. Age criteria will differ from bank to bank; before applying for personal finance loans for Self Employed, check with the bank and find out what their requirements are. If the applicant’s age is not sufficient to apply for finance loans, then one has no choice but to wait and become eligible for bank lending.

Income

If a borrower meets age requirements, the next step is to check if the income they draw is sufficient to apply for a loan in India or not. The minimum income of a self employed professional should be Rs. 2 lakhs per annum according to Bank of India loans. Income criteria will vary from one bank to another and also between loans and lending companies. Some banks even have special schemes and offers available for Doctors. The loan amount eligibility is entirely dependent on the income of the individual. If the income is high, the bank will offer a higher loan amount, which can be up to Rs. 20 lakhs. One can also use BankandFinance.com personal loan calculator to check monthly installments and the bank interest rate that will need to be repaid at the end of the tenure.

Residential Type

Where an applicant lives is also an important factor to be considered when applying for a personal loan in India. Depending on the residence type, the bank will grant you finance loans. A borrower’s loan eligibility will be enhanced if they live with family. Residence types can be classified as – living with family in an owned or rented house, with friends in a rental or owned house, living with one’s spouse, living a paying guest or living alone. As a part of the bank lending process, the bank is duty bound to check residence details and then approve the application to sanction the loan in India. It is a borrower’s duty to check the current interest rate offered by banks as it will have an impact on their ability to get and repay loans.

Business Continuity

Business continuity is the number of years the applicant’s company has been in business. The company’s profile, the nature of business, and the detailed articles about the business should be included with the application for bank lending. The borrower should have been in business at least 3 years at the time of applicant. In case it is less than 3 years, then the applicant has to find those banks which are willing to offer a loan in India to businesses. Personal finance loans for Self Employed in India for self-employed professionals will have a bank interest rate which is likely to be different from one which is offered to salaried professionals. It is also possible that interest rates are different from one company to another. Self Employed Professionals can be doctors, architects, Chartered Accountants, Company Secretary, sole proprietors, partners, directors, Private Companies and partnership firms.

Documents Required

Banks in India will ask for documents which show that your income, age, and profession are correct and verifiable. The list of documents that are required are:

  • Age Proof
  • Income Proof
  • Residence Proof
  • Business Proof
  • ID Proof

Age Proof could be in the form of:

  • Voter ID
  • Birth Certificate
  • Driving License
  • PAN Card
  • Passport
  • 10th Class Mark Sheet

Income Proof would include:

  • Form 16
  • Last 3 years Income Tax Returns

Residence Proof could be any of the following:

  • Electricity Bill
  • Telephone Bill
  • Passport
  • Driving License
  • Rental Agreement
  • Lease Agreement
  • Mobile Bill
  • Utility Tax

Business Proof should include:

  • Certificate from the municipal corporation showing the business proof
  • Government Registration Certificates
  • Nature of the Business
  • Company Profile

These will be required by any bank or financial institution in India. Make a detailed list of all the documents and submit the same at the time of filling out the personal finance loans for Self Employed application form to get a loan in India. Gather all the required information about the loan, the interest rate and terms and conditions from all banks. Make sure to compare the interest rate, fees and charges applicable before making a decision.

There are many tools like personal loan calculator and interest rate calculator available for free where one can figure out what the EMIs and the total amount is likely to be with different banks. Fill out the requisite application form to receive the best rates on Bank Lending.