Self-Employed? Here’s What You Must Know About Choosing The Right Personal Loan

Afternoon naps, unlimited coffee breaks, and flexible working hours are some of the few attractive benefits of being self-employed. Whether you are a freelance writer, a corner shop owner, or an expert plumber, you have the choice to design your work routine as per your needs. 

But, with great perks comes great responsibility, and if you are a Marvel fan, who knows this better than you do? With irregular payments, a lack of additional service packages, and no yearly bonuses, managing your finances can be a tough challenge. When you’re in a tight spot with your budget and need quick financial help, personal loans from reputable banks and NBFCs are your best work buddy. 

In this blog, we’ll go into detail about why applying for a personal loan is a great option for self-employed individuals, along with the process, eligibility, and documentation required. 

Discover the Exciting Benefits of an Instant Loan For Self Employed  

When it comes to self-employed individuals, a personal loan should be your go-to option for financing. From the fast dispersal of funds to flexible repayment terms, you can enjoy multi-fold benefits:

• Quick Financing Solution

If you are opting for a personal loan, chances are you need funds within a short interval. Personal loans are known for their quick application process and minimal documentation. With MyMudra, you can get your personal loan approved within 24-48 hours, followed by fast funds disbursement into your bank account. 

• Versatile Usage of Funds

Unlike restricted loans such as home loans or plot loans, which require a specific application of funds, you have free rein to use the personal loan amount. Whether you want to invest in a new laptop for your work, pay your rent, or spend it on your travel, the choice is all yours. 

• Flexible Repayment Terms

Most banks and NBFCs offer a wide range of options for repayment terms, including tenure, method, and interest rates. You can enjoy repayment tenure from 12 months to 84 months to find the one that suits your financial planning. You can also choose how you want to pay your monthly payments, such as digital or physical deposits. To calculate your monthly deposits based on your tenure, you can use the My Mudra EMI calculator and pick what suits you best. 

• No Collateral Needed

For personal loans, you don’t need to have high-value collateral. These are unsecured loans which help freelancers and professionals living in rental apartments get finance without any hassle. 

• A Chance to Boost Your Credit Score

The credit score is the most valued factor in loan approval. Especially if you are thinking about opting for home loans in the near future, a small personal loan will offer you the chance to improve your credit score without putting too much financial burden on your shoulders.

Eligibility Requirements for Self-employed Personal Loan

Before applying for personal loans from any bank or NBFC, have a look at the general eligibility criteria to get an instant loan for self-employed individuals:

• Age Requirement: You need to be between the ages of 21 and 58 to apply for the loan.

• Income Stability: You must have a stable source of income. Most banks require a minimum of Rs. 30,000 in monthly income. However, the amount can change based on factors such as loan amount, tenure, and profession. You can also showcase other income sources, such as rental, dividends, and interest. 

• CIBIL Score: The higher, the better. Having a score of 700 and above will clear you for most banks' personal loan criteria.

Documentation Required for Urgent Loan for Self Employed

Make sure that you have gathered all the necessary documents before applying. Here are some general documents that are necessary for any personal loan: 

• Identity Proof: Aadhar Card and PAN Card
• Address Proof: Utility Bills, Aadhar Card and Driving License
• Income Proof: The last 6 months’ bank statement and the ITR for the past two years
• Business Proof: GST registration and Business License
• Photograph: Passport-size photographs 

Tips For Self-Employed To Improve Their Chances Of Getting a Personal Loan

You can implement these tips while applying for a personal loan from lenders for fast approval and disbursal for self-employed borrowers: 

• Research and Compare

There are so many lenders in the market that offer a variety of interest rates, services, and tenures that finding the perfect one is tough. Check each detail or ask for a quotation to get a better understanding. Focus on factors such as customer service and flexibility in order to have an easy time. You can also take help from financial partners like MyMudra to connect with many reputable banks and NBFCs. Check out some popular options:

• Importance of Credit Score

Maintaining a good credit score would help you secure favorable interest rates and terms. An urgent loan for self employed individuals requires a credit score of more than 700 to qualify for the personal loan at a low-interest rate. So that you can get a better deal on your personal loans.

• Keep Your Documents Ready

Other than regular documents such as Aadhar card, PAN card and driving license, you may require documents such as business license, ITR, and profit statements for your business. The bank may ask for around two or three years of tax returns to ensure proper documentation. To ensure your personal loan is approved smoothly and without any issues, having proper Income Tax Return (ITR) documentation is crucial. So, file your taxes on time and keep all your licenses ready beforehand.

• Co-Applicant

If you are looking to apply for a personal loan with another individual, you can do that with a co-applicant loan. You can both decide on the process of repayment accordingly and enjoy a reduced burden on your shoulders. If you’re partnering with a person with an excellent credit history, you can enjoy lower interest rates and a larger loan amount, too.

Conclusion

Navigating a personal loan along with the latest emerging options for a self-employed individual requires an understanding of how to secure financial support effectively. So, by considering factors like its benefits, documentation, eligibility, and repayment terms. You can now book instant personal loan options by applying for the loans online at the My Mudra website to secure your future and enjoy your independence along with your responsibilities.