There is a common myth among self-employed individuals that they are not eligible for personal loans. The misunderstanding comes from the assumption that banks will disburse loans only to salaried individuals. This can lead to unnecessary stress for the self-employed. When faced with a shortage of cash or when they require cash for emergencies, or even for something more planned such as a much-needed vacation, they either borrow money from friends and family, mortgage their property, belongings, or vehicle or just make do without the money.
However, all this is unnecessary as self-employed individuals are very much eligible for personal loans as well. So, if you’re a self-employed individual reading this, the next time you need some urgent cash, don’t panic and ask your family or friends for a loan. Just head to your bank, apply for a personal loan, get the money you need without any hassle, and keep your head up high.
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Personal loans are provided by banks for any purpose that is entirely up to you. They are short-term loans that are unsecured (meaning they do not have any collateral attached to them). They may have shorter repayment tenures and higher interest rates than other kinds of loans, which is one thing you need to be aware of.
Today, personal loans can be applied for and disbursed completely online, which makes it a paperless and hassle-free transaction. There are many leading banks in the country that have made the personal loan disbursement process quick and easy for you. As long as you have your documentation in order, then the amount you need could be in your bank account within a couple of hours or just a few days.
Personal loans do not require any collateral, so there is no danger of getting your property/belongings/vehicle seized by the bank in case you default on payments. However, any default on your EMI repayments would adversely affect your credit score, which in turn would adversely affect your loan approval the next time you apply for any kind of loan. This is an important thing to keep in mind.
Banks do not enquire the reason you are applying for a personal loan. This means you can get it without any intrusive questions and use it for whatever purpose you desire.
All that self-employed individuals need to do is furnish proof of their steady income and continuity in employment, whether that is freelance or a business. These documents could be an office lease agreement, recent bank statements, tax returns, audited financials, etc. There is a minimum specific income requirement, which can vary from bank to bank or location to location. Besides this, you would also require the standard documentation, which is proof of identity and proof of address. Also, depending on the type of organization or profession you are in, you may require additional documentation, which is specific to the bank.
There are two ways to go about this. One is to visit your bank’s branch directly and apply for the loan there. The other is to apply online through the bank’s website. There are also several aggregator websites that offer information on loans from different banks so you can compare and choose which bank is the best for you.
This differs from bank to bank and on the loan amount that you are securing. Repayment tenure can range from 12 months to 60 months. EMIs can start from as low as Rs.2,000, again, dependent on your loan amount.
There are many reasons you can apply for a personal loan, some of which are:
There are a variety of reasons why you would go for a personal loan as a self employee. Personal loans ensure that your dreams are not put on hold anymore for want of money. Whether it is to fund your own wedding or that of a family member, your own education or that of your child, to go on a dream vacation, or to make your dream home a reality, personal loans can take away the stress and headache of looking for money when you need it the most. Online banking makes it possible to get the money instantly as well, with minimal documentation, time, and hassle, making personal loans a boon for the self-employed
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