How is a personal loan beneficial to self-employed individuals?
The Indian economy has been affected by the global coronavirus epidemic, which was followed by a statewide lockdown. Its consequences are already being felt today, with thousands of people losing their employment and means of subsistence. So, a personal loan for an individual business is very significant. But what is a self-employed personal loan?
What is a self-employed personal loan?
A self-employed personal loan is a type of credit facility offered by banks and other financial institutions. It helps to meet the specific financing needs of borrowers. A lender will provide loans at some interest rate to the customers for a fixed period.
Self-employed personal loans are also unsecured. That means they do not require any collateral from you. There is no need to provide the creditor with anything as security. None of your property or assets is at risk if you fail to repay.
Instant Personal Loans: A Banking Revolution?
Many developments have occurred in the banking business in recent years. Likewise, instant loans are one of them. This loan represents the necessary change at the time.
From the start of banking, applying for a self-employed personal loan has been time-consuming. Thus, it was essential to introduce a new lending instrument. It would make it easier for people to avail themselves of it.
Instant self-employed personal loans solve all the above problems and create a new lending age.
Factors for Self-employed Personal Loans Online with Instant eApproval
Here are some factors on which your self-employed personal loan approval will depend.
Age
The younger you are, the better your chances are of securing a loan. When you are young, the bank or other financial institution believes you will be more capable of repaying the loan. In the case of an Insta Loan, your age should be between 25 and 65 years old. This stands true no matter whether you are a paid employee or self-employed.
Income
Your income is the most important factor in determining if you can get a self-employed personal loan. Your chances of making on-time payments increase as your income rises.
Employment
Your eligibility for an Insta Loan is also strongly influenced by your employment stability. You must have at least two years of work experience in your current field. This is when you are a salaried applicant. Also, you should have a minimum five-year earnings turnover if you are self-employed.
Credit Rating (CIBIL Score)
Your credit score is really valuable. It shows both your financial borrowing and repayment history. Your loan chances increase if your credit score is high. A credit score of 750 is generally regarded as good. You may have fewer chances if your CIBIL score is less than 750. In some instances, you may get a loan with this credit rating. Still, your interest rate will be slightly higher than others.
How do I be eligible all the time?
In an emergency, a self-employed personal loan is the quickest fix. However, one must meet the discussed requirements to use the loan facility. Your application for a self-employed personal loan through the internet will be rejected if these requirements are not met.
CIBIL Score:
To be eligible for an Insta Loan, you must have a CIBIL score of at least 750. Your CIBIL score reflects your borrowing and repayment history. A strong CIBIL score shows that you have a good mix of secured and unsecured loans and that you have been consistent and timely with your repayments. A candidate with a high CIBIL score is a creditworthy borrower accustomed to InstaLoan payments (if disbursed).
Monthly Income:
To repay any loan in equal monthly instalments, or EMIs, a borrower must have sufficient income to cover other expenses like rent, food, bills, clothing, and transportation even after paying the EMI. To have money left over for other expenses, the ratio of the total monthly EMIs generally shouldn’t be higher than 35% of the monthly income. Even if you have a high income, your fixed monthly obligations shouldn’t be more than 60% of your take-home pay.
Job Stability/Employer:
Salaried workers at reputable companies and multinational corporations have a secure future and a job. On the other hand, small and medium-sized businesses, sole proprietors, and start-ups do not have a specific lot. There is always the chance that these will close down at any time, jeopardising their employees’ financial future.
Eligibility criteria for a self-employed personal loan
If you are self-employed and match the following criteria, you can apply for a fast personal loan:
- The organisation must have been in existence for at least three years.
- 25 years of age is the minimum requirement.
- Maximum age requirement: The client must be under 65 at the end of the loan duration.
Documents required
If you have the following documents, you can apply for a personal loan online:
Identity proof
- Valid Indian Passport
- Valid Voter ID
- Valid Driver’s Licence
- Pan Card
- Aadhaar Card
Address proof
- Aadhaar Card
- Valid Indian Passport
- Valid Voter ID
- Valid Driver’s Licence
Conclusion
A personal loan can be used for several things, including business needs. If you are self-employed, learn how to obtain a personal loan for business purposes. Piramal Finance is an excellent financing solution for customers looking for low-interest personal loans. Visit Piramal Finance’s website to learn more about its offerings and services.