A personal loan is a type of unsecured loan that is available to both salaried and self-employed individuals. A personal loan for self-employed people is perfect for both personal and business purposes, such as buying new equipment or machinery, renovating your home, paying medical expenses, going on vacation, getting married, and so on. A self-employed person can easily apply for a personal loan online and pay it back whenever he wants.
Features and Advantages of a HDFC Self-Employed Personal Loan
- The application procedure is simple: A self-employed person can apply for a personal loan on the lender’s official website or through financial platforms such as Afinoz. The application process is simple to follow and can be done from the convenience of your own home or workplace.
- Loan amount: HDFC Personal loans for self-employed people start at Rs. 50,000 and can go up to Rs. 40 lakh, allowing them to deal with a variety of financial difficulties.
- Minimum papers: A self-employed person can apply for a personal loan online by uploading a few basic documents such as identification, address, and proof of income. This saves you the trouble of lugging loads of paperwork to the bank.
- Flexible tenure: All personal loan lenders give self-employed borrowers the option of choosing the length of their loan based on their repayment abilities. The length of the contract is usually between 12 and 60 months.
- Quick disbursement: Once a self-employed personal loan is approved, money is disbursed to your bank account in 3 to 5 business days.
Interest Rates on a Personal Loan for Self-Employed People
Personal loan interest rates for self-employed people start at a minimum of 10.75 percent and vary depending on credit score, loan amount, age, repayment ability, and other factors.
Criteria for Eligibility
- You must be a self-employed person.
- You must be at least 21 years old to participate.
- Your annual income should meet the bank’s eligibility requirements.
- Your company should have been in operation for at least two years.
Required List of Documents
- ID Proof: Aadhaar Card, PAN Card, Voter ID Card, Driving License, Passport.
- Ration cards, utility bills (electricity bills, phone bills, etc. ), PAN cards, Aadhaar cards, voter ID cards, and so on are all acceptable forms of proof of address.
- Proof of Business Existence, Certificate of Incorporation, and Certificate of Registration with Appropriate Registration are all examples of business proof. ITR from the previous two years, as well as a certified profit and loss statement.
Self-employed Personal Loan with:
- Credit Score Issues- When you apply for a new loan, one of the first things a prospective lender looks at is your credit score.
- This is true not only for self-employed borrowers but also for salaried borrowers seeking a personal loan. A low credit score makes it more difficult for a self-employed person to obtain a personal loan. Furthermore, if a self-employed individual with a low credit score gets authorized for a personal loan, such offers frequently have a higher interest rate than those offered to those with higher credit ratings.
- As a result, self-employed applicants should verify their credit score before applying for a personal loan and take action to maintain a good credit score to receive the best personal loan offers.
- There is no proof of income- A lender considers repayment capability as one of the primary variables (together with credit score) when analyzing a personal loan application.
- The lender examines both the applicant’s income and his or her previous debt when determining an applicant’s repayment capability. While salaried candidates can easily produce a pay stub or a salary certificate together with Form 16 as proof of income, self-employed people do not have this option.
- In the case of an unsecured loan, such as a personal loan, income proof documents are also required. As a result, a self-employed person cannot obtain a personal loan without providing proof of income or other financial documents.
- For the past 2 to 5 years, key examples of such documentation include P&L statements, acknowledged Income Tax returns, verified Balance Sheets, and so on.
Interest Rates for Self-Employed Personal Loans are Influenced by a Variety of Factors
- Banks assess an individual’s credit score, which is a reflection of his payback history, before issuing a personal loan. As a result of your strong credit score, lenders are more willing to offer you a cheaper interest rate because you have been consistent with your payments.
- Income: The higher your income, the more likely you are to get approved for a personal loan with low-interest rates. This is because a larger income indicates that you will be able to return the loan promptly.
- Firm tenure: If your business has been profitable for at least two years, you can acquire a personal loan with a low-interest rate because of its stability.
- Relationship with the bank: If you currently have a checking or savings account with the bank, or if you have an existing loan that you have been paying off on time, you may be eligible for a personal loan at a lower interest rate.
Aspects to Consider Before applying for a personal loan, a self-employed applicant should think about the following:
- Credit score: Before approving a personal loan, all lenders look at your credit score. As a result, a low credit score may result in your personal loan being denied or being authorized for a high-interest personal loan. As a result, if you plan to take out a personal loan, be sure you have a strong credit score.
- Before you buy, compare: Personal loan offers from different lenders may have varying interest rates, and it is not practical to visit multiple websites to compare them. The simplest method is to check all of the lenders’ personal loan interest rates on Afinoz, compare them, and then choose the lender with the lowest interest rate.
- Examine the loan’s total cost: A personal loan comes with a number of fees and charges, including processing fees, foreclosure fees, late payment fees, and so on. As a result, before applying for a personal loan, think about the entire cost of repayment.
- Ability to repay: Before deciding on a loan amount, consider if you will be able to manage your monthly expenses after paying the EMI dues. If not, it’s a good idea to borrow less than you can afford to repay.
Conclusion:
To conclude, HDFC personal loans for self-employed can be easily availed at Afinoz at a low rate of interest. All you need is to visit the Afinoz’s site and get in touch with their expert team.
