How to Get a Personal Loan for Self-Employed: Benefits, Interest Rates, Eligibility and Documents
Thanks to technology and advancements in the financial sector, getting a personal loan for self-employed individuals has become relatively easier. Earlier, it was only the salaried sector that would get preferential rates and pre-approved loan. Fast-forward to today, many banks and financial institutions in India offer personal loans to self-employed individuals at competitive interest rates.
Read on to know the features and benefits, compare interest rates and tenure, eligibility and documents required to apply for a personal loan online today!
Features And Benefits of a Personal Loan for Self-Employed
- Instant Loan Approval and Disbursal
Eligible self-employed applicants could get their loan disbursed almost instantly. For instance, with Navi, you can get instant cash loan in 1 hour without documents at attractive rates.
- Flexible Loan Amount
You can get instant cash loan in 5 minutes ranging from Rs.10,000 to Rs.45 lakh. So, apply according to your requirement. Note that the final amount disbursed entirely depends on the lender.
- No Collateral
Personal loans are unsecured loans, which means you don’t have to pledge collateral.
- Minimal Documentation
Traditional banks still have a paperwork-driven system. However, self-employed professionals can apply for personal loans with just PAN card and Aadhaar number through the Navi app. This makes availing of a loan hassle-free.
- Flexible Loan Tenure
Banks and financial institutions provide flexible loan repayment tenure ranging from 3 months to 6 years. Therefore, you can plan your EMI payment accordingly without worrying about financial pressure.
Personal Loan Uses For Self-Employed
There are many reasons why a self-employed individual applies for a personal loan:
- To add additional funds into their business.
- To fund children’s education.
- To renovate the home.
- To meet any emergency medical costs.
- To fund a wedding in the family.
- To pay off debt.
- To fund a much-needed dream vacation.
- To meet any emergency requirements.
For any urgent fund needs you can simply apply for a personal loan online. Check how to do so in the next section.
Also Read
Compare Interest Rates of a Personal Loan for Self-Employed
| NBFCs/Banks | Interest Rates (p.a) | Max Loan Amount | Tenure |
| Navi | Starting at 9.9% | Up to 20 lakh | 3 months to 72 months |
| Citibank | 9.99% – 16.49% | Up to Rs.30 lakh | 12 months to 60 months |
| Kotak Mahindra Bank | 10.25% onwards | Up to Rs.20 lakh | 12 months to 60 months |
| Yes Bank | 10.99% onwards | Rs.1 lakh – Rs.40 lakh | 12 months to 60 months |
| IndusInd Bank | 11.00% onwards | Rs.50,000 – Rs.15,00,000 | 12 months to 60 months |
| Fullerton India | 11.99% onwards | Up to Rs.25 lakh | Up to 60 months |
| HDB Financial Services | Up to 36% | Up to Rs.20 lakh | 12 months to 60 months |
Calculate Your Personal Loan EMI
Loan Amount
Rate of Interest (P.a)
%
Loan Tenure (Months)
Monthly EMI
0
Total Interest
Total Amount
Follow these steps to apply for a personal loan online:
- Visit the lender’s app or website.
Download the Navi app on Android or iOS. Enter your mobile phone number.
- Enter OTP
You will get a OTP on your mobile. Enter it.
- Enter Your Details
Add your name, date of birth and PAN card number.
- Enter your Profession
Add all details regarding your profession.
- Approved Loan Amount Displayed
Approved loan amount and EMI will be displayed on screen.
Eligibility Criteria for a Personal Loan for Self-Employed
- Age – 22 – 65 years
- Minimum annual income – Rs. 4.8 lakh
- Self-employed non-professionals’ minimum turnover – Rs 40 lakh
- Self-employed professionals’ minimum turnover – Rs 15 lakh
- Work experience – 4 years
- Self-employed professionals’ minimum profit after tax – Rs. 2 lakh
- Age of business – 5 years (can be relaxed for Doctors)
- Existing customer of the back or NBFC.
However, with Navi you would just need to fill in a few basic details to know your loan eligibility. Any Indian citizen above 18 years could apply for a Navi personal loan.
Documents Required for a Personal Loan for Self-Employed
Take a look at the list of documents one needs to furnish during the instant cash loan application process for self-employed individuals:
- Age proof – Birth certificate or 10th standard marksheet.
- Address proof – Passport, Aadhaar Card, voter ID or driving license
- ID Proof – Aadhaar card, PAN Card, voter ID or passport
- Proof of highest qualification – Copy of degree certificate
- Income tax returns of last 2 years.
- Passport-size photo
- 6 months’ Bank account statements
- Business existence proofs
With Navi, you would only need your PAN and Aadhaar number only as primary documents.
Fees And Charges
When you avail of a personal loan, the lender charges certain charges for processing and disbursing the loan. Here’s a list of fees and charges that you may be required to pay:
- Processing fee – Usually varies between 3% – 6% of the loan amount + GST.
- Foreclosure charges – In case you prepay the entire loan amount, you may need to pay foreclosure charges decided by the lender. Navi doesn’t charge any loan foreclosure fee.
- Loan cancellation charges – If you cancel the personal loan, you may need to pay loan cancellation charges as decided by the lender.
- Interest on delayed EMI payments – Delaying EMI payment of the personal loan will not only affect your credit score but you may also be charged a penalty fee.
- Account statement charges – If you want to check your account statement, the lender may charge you a certain amount.
- Document retrieval charges – If you have misplaced important documents related to the personal loan, you may need to pay additional fees to retrieve the documents.
Factors Affecting a Personal Loan for Self-Employed
- Credit score – Credit score ranges between 300-900. Higher the credit score, better the chances of getting a personal loan approval. A credit score of 750 and above is good for getting a personal loan. Here’s how to improve your credit score.
- Business type – The lender determines loan eligibility depending on the type of business you have and the activities involved.
- Monthly turnover – Monthly turnover is a good indicator of the health of the business. A high turnover increases the chances of getting a personal loan.
- Age of Business – A well-established business running for many years have a higher possibility of getting a personal loan approval.
Final Word
A personal loan can help reduce financial burden for a self-employed person. Since there is no restriction on end-usage, you can use the funds to pay off debts to expanding your business and for personal needs. Check your loan eligibility and compare interest rates before you decide to get a personal loan. For a hassle-free process with minimum documentation and loan disbursal in minutes, download the Navi app on Android or iOS now!
FAQs on Personal Loan for Self-Employed
Ans: It entirely depends on the applicant’s eligibility. Pre-approved applicants could get loans almost instantly. Check with your lender to know the loan application – disbursal timeline.
Ans: Most lenders offer personal loans to both salaried and self-employed professionals and non-professionals. If you’re self-employed and eligible for a loan, you can too.
Ans: Documents required for availing of a loan vary from lender to lender. For instance, with Navi, you can get a personal loan after completing your KYC with Aadhar and PAN.
Ans: No, personal loans are unsecured loans. You don’t need to provide collateral or security to get a personal loan.
Ans: You can use the loan for several purposes, including funding your business, meeting any emergency requirements like medical expenses and to have additional funds at your disposal, to name a few.
Ans: During personal loan applications, most lenders charge a certain processing fee. This may vary from lender to lender. Other charges post loan disbursal may include loan foreclosure fees. However, Navi doesn’t impose any foreclosure fee in case you decide to prepay your loan before the scheduled tenure.
Ans: While approving a loan amount, lenders consider a borrower’s income that reflects his/her repayment capacity and credit history. Therefore, any default in a borrower’s track record can affect his loan amount eligibility.
Ans: On securing financial instruments such as a personal loan, borrowers can opt for fixed or floating rates of interest as per their requirements. A fixed-rate interest rate does not change over the loan tenure whereas a floating interest rate might fluctuate with changes in the market condition.
Before you go…
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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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