How to Qualify for a Personal Loan for Self Employed?

Here’s a dilemma!

If you are a self-employed individual, banks can be a bit reluctant about giving personal loans to you. They have several terms and conditions in place that make availing a personal loan for self-employed individuals highly impractical.

But think, pause, relax! There is someone who’s got your back.

Who? NBFCs.

NBFCs don’t have stringent terms and conditions that make it impossible for self-employed personnel to take such a loan. In addition, they also provide pre-approved offers for existing customers that make the process even simpler.

Bajaj Finserv is one such NBFC that provides personal loans to self-employed individuals. Owing to no collateral requirement, one doesn’t need to mortgage or hypothecate an asset with financial institutions like Bajaj Finserv.

Though NBFCs make the process of taking a personal loan straightforward for self-employed individuals, they still require you to meet their eligibility.

Don’t worry; these are just some minimal requirements that almost all business persons have.

Personal Loan Eligibility Criteria for the Self-Employed:

To apply for a personal loan in an NBFC, you need to fulfill the following criteria –

  • The vintage of the business

The first and foremost criterion to fulfill for taking a personal loan for self-employed individuals is to have a business with a vintage of 3 years.

Why this vintage?

Financial institutions need this vintage to ensure that your business has maintained a clear and concise track record with your customers and suppliers. NBFCs look for businesses with such a vintage to ensure trust and credibility.

Moreover, a business requires at least 3 years achieving considerable growth. With such growth, a business and its head would have enough funds to repay a personal loan from a financial institution.

  • Income tax returns filing

The second criterion to fulfill – income tax returns. NBFCs want your business to submit income tax returns for at least the previous year. With an IT return, financial institutions can make out your total income and ensure your business follows all legal implications.

Furthermore, the financial instructions can also calculate Fixed Obligations to Income Ratio (FOR) based on your IT returns. Depending upon your FOIR, NBFCs will determine the amount of EMI you should dispense with the personal loan.

Elaborating FOIR:

They check to see that all your loan obligations or liabilities remain within 3/4th of your income. The financial institutions would provide the personal loan for self-employed individuals in such a way so that its EMI and all other monthly liabilities does not cross the prescribed income mark.

  • Audited turnover

Another eligibility criterion laid forward by the financial institutions require you to audit your business’s last year’s turnover by a CA.

Why the audit?

Auditing makes sure that your business follows all ethical practices and does not abide by illegal methods. The process would further isolate your income from your business and other sources. The financial institutions would then get a clearer picture of your business’s income, which can also vouch for its credibility.   

Other than the above 3, an applicant needs to fall between the age of 22 to 55 years to apply for a personal loan.

Now that you have learned about the eligibility criteria for self-employed individuals to sanction a personal loan, apply for one now. The NBFCs make it easier for people like you to avail such a loan and furthermore include various features.

What features can I get?

They can offer you:

  • Attractive interest rates.
  • High financing options.
  • Flexi loans that enable you to pay interest on the borrowed amount.
  • Access your loan account online from anyplace anytime.

Personal loan for self-employed individuals just got more straightforward thanks to financial organizations. Head over to their website and apply for one today!