Personal Loans are an excellent financing option to meet unforeseen emergencies. Competitive interest rates, minimal documentation, and quick disbursal are the key features of Personal Loans. The best part about such Loans is that there are no restrictions on how you use the amount. Whether you plan a family trip abroad or want to renovate your home, Personal Loans solve all your financial issues.
You could also apply for an Instant Loan for self-employed within minutes of using Internet Banking. You only need to fill out the Loan application and upload the necessary documents. On approval, funds get credited to your account in the shortest timeframe. Both salaried and self-employed applicants can apply for the Loans.
The eligibility for Personal Loan and documentation can be a little different for self-employed applicants, given their employment status. Following are the factors influencing Loan approval for self-employed applicants:
This is the primary factor on which any Loan approval depends on. The credit score is a numeric report of your credit history and behaviour. The score helps the bank establish your credibility as a borrower. Personal Loans are unsecured, and you need not provide collateral to secure the Loan amount. Given this, the bank requires 100% surety about your creditworthiness and repayment capacity.
A credit score of 750 is considered satisfactory for Loan approval. Anything above 750 credits is a plus point and allows you to negotiate a lower interest rate and better repayment terms.
It is an important factor that the banks check for when approving a Personal Loan for self-employed. The income criteria can be a bit stricter and higher in the case of a self-employed applicant. Since you are not salaried, having a stable and regular source of income can be challenging. The banks need to know if you can have the required funds to repay the Loan amount.
The bank reviews your profit and loss statement and business books to note your income. If the bank finds several irregularities in your profit and loss statements, they become cautious with your Loan request.
Continuity of business
This is another factor that influences Loan approval for self-employed applicants. The banks check your business experience. Generally, most banks require the applicant to be in the business for three years or more. However, these criteria differ between banks and applicants. Visit the bank’s website or contact their customer representative to get more details about the Loan eligibility.
You could use the Personal Loan Eligibility calculator to check your criteria before applying. Checking your eligibility helps avoid rejections and delayed approval. Moreover, it gives a chance to determine the Loan amount you are eligible for and make a Loan request accordingly.
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