Personal Loan for Self Employed

Note: The above-mentioned interest rates, fees and charges may change and shall depend on the sole discretion of the banks/NBFCs.

Personal Loan Interest Rates for Self Employed

Starting from a minimum of 10.50% p.a., personal loan interest rates for self-employed professionals and self employed non-professionals may vary from individual to individual depending upon his/her credit score, loan amount, age, repayment ability, etc.

Comparison of Personal Loans for Self Employed Individuals

Eligibility Criteria for Personal Loan for Self-employed Individuals

• You should be a self-employed professional/non-professional
• You should be at least 21 years old
• Minimum credit score should be 750 or above
• Your annual income should match the eligibility criteria set by the bank
• Your business should be running for at least 2 years

Documents Required for Loan Application

• Duly filled application form with passport-sized photographs
• ID Proof: Aadhaar Card, PAN Card, Voter ID Card, Driving License, Passport, etc.
• Address Proof: Ration Card, Utility Bills (Electricity Bill, Phone Bill, etc.), PAN Card, Aadhaar Card, Voter ID Card, etc.
• Business Proof: Proof of Business Existence, Certificate of Incorporation, Certificate of Registration with Appropriate Registration Body
• Income Proof: ITR of Past 2 years, Certified Profit and Loss Statement
• Any other document required by the bank

Factors Affecting Personal Loan Interest Rates

• Credit score: Before approving a personal loan, lenders check the applicant’s credit score to evaluate his creditworthiness. A good credit score (above 750) indicates that you have been disciplined with your repayments and the lenders do not hesitate to offer you a lower interest rate
• Tenure of business: If your business is running in profit for at least 2 years, you get a personal loan at a low-interest rate due to stability in business
• Relationship with the bank: If you already have a current or savings account with the bank or you have an existing loan that you have been repaying regularly, you may get a personal loan with a lower interest rate

FAQs on Personal Loan for Self Employed

How can I apply for a personal loan for self-employed offline?

To apply for a personal loan for self-employed offline, you can visit the nearest branch of your chosen lender, leave an online query with their loan department or call up the prospective lender’s customer care department.

Can I use a personal loan for self-employed for use in business purposes?

Yes, most banks allow you to use a personal loan for both personal as well as business purposes. There is currently no restriction on the end-use of a personal loan for self-employed, hence you can fund various expenses including home renovation, purchasing equipment/gadgets, vacation, wedding, etc.

I have never filed Income Tax Return. Can I apply for a personal loan?

ITR works as income proof for self-employed professionals and self-employed non-professionals. Thus, if you have not filed ITR, you might not be eligible for a personal loan from a leading bank. However, you can try contacting NBFCs, which might offer you a personal loan without asking for income proof.

Also Know: How to get a personal loan without proving your income

I was working with an MNC 8 months ago and have just started my own business. Can I avail myself an  personal loan for the self-employed?

Most lenders prefer giving a personal loan to self-employed individuals who have businesses running in profit for at least 2 years. However, a few NBFCs may offer personal loans even if your business is completely new.

Do I have to pay a processing fee to process my loan application?

Yes, all lenders ask for processing fees that usually start from 1% of the sanctioned loan amount plus GST. This processing fee is non-refundable and usually varies from lender to lender.