Personal Loan for Self-Employed
For entrepreneurs seeking financial support, personal loans tailored to business needs are a promising avenue. These loans offer competitive interest rates, simplified application procedures, and adaptable repayment options. No need for collateral or guarantors, and most lenders maintain transparency about terms and charges. Some even provide additional benefits such as personal accident insurance. It's a practical financial solution designed to support business leaders on their journey to success.
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Features and Benefits
When considering a personal loan for your business, the advantages are noteworthy. Here are some:
- Streamlined application process with reputed lenders
- Quick processing times for efficient loan approval
- Competitive interest rates for cost-effective borrowing
- Versatile use of the loan amount for personal or business-related expenditures
- Flexible repayment options tailored to individual preferences
- No requirement for collateral, security, or a guarantor, to enhance accessibility
- Transparent communication of loan terms and charges by most lenders
- Supplementary benefits like personal accident insurance offered by some banks along with the loan
Eligibility Criteria for a Personal Loan for Self-Employed
The eligibility criteria for a personal loan for business owners may vary from one lender to another. However, the following are the typical eligibility criteria you can expect as a self-working individual applicant for personal loans.
- Nationality: You must be an Indian
- Age: Your age must fall somewhere between 21 to 65 years old.
- Occupation: Self-employed individuals are eligible.
- Income: The minimum income requirement may vary from Rs. 15,000 to Rs. 40,000 per month, depending on the lender and the loan amount.
- Business History: You must have a minimum experience of at least 2 years with your business.
- Credit Score: You must have a good credit score of at least 700 or above.
- Documentation: You must have a valid identity proof, address proof, income proof, and proof of end use of the loan amount.
Charges and Fees
When getting a business loan, watch out for upfront fees, usually between 1% to 5% of the loan. Make sure you pay your monthly instalments on time to avoid extra charges. Also, some lenders might charge you if you want to pay off your loan early. Always check and understand these fees before making decisions.
Documents Needed
When applying for a personal loan for a self-employed individual, you need to provide the following detailed documents:
Identity Proof & Address Proof:
- PAN Card (mandatory)
- Aadhaar Card
- Valid Indian Passport, Driver's License or Valid Voter ID
- Utility bills
- Ration cards
Income Proof:
- RBI Approved Account Aggregator Process/Bank statements for 6 months
Other Documents:
- Highest professional degree
- Income Tax return of last 2 years with income computation
- Proof of business or GST number
Comparison of Personal Loans for Self-Employed Individuals
Different banks in India provide personal loans for business owners, and the interest rates may vary based on your financial history. Your personal details and creditworthiness affect these rates. Here, we've shared the current interest rates for personal loans for self-employed individuals from top banks in simple terms.
| Lenders | Interest Rate (p.a.) |
| Axis Bank | 10.49% onwards |
| IndusInd Bank | 10.49% onwards |
| IDFC First Bank | 10.75% onwards |
| HDFC Bank | 10.50% onwards |
| ICICI Bank | 10.65% onwards |
| Kotak Mahindra Bank | 10.99% onwards |
| Tata Capital | 10.99% onwards |
| Bajaj Finserv | 11.00% onwards |
| Federal Bank | 11.49% onwards |
| DMI Finance | 12.00% - 40.00% |
| Piramal Finance | 12.99% onwards |
| Aditya Birla | 13.00% onwards |