Personal loans for self-employed persons: Key things to know

Personal loan: To procure a personal loan, an applicant should have a regular income, a high credit score and a sound bank statement. Other factors which a lender may consider include income tax return for the past two years

Posted on: 3 Oct 2024 11:17 AM IST

Personal Loan: While taking a loan, applicants need to prove their own legal ability to repay.

If you want to arrest a personal loan but don't want to work in real time, rest assured. Most banks also lend to self-employed people, taking into account other circumstances.

For those who don't know, a personal loan is an unsecured loan that banks provide to borrowers for personal matters that can be anything from marriage to home repairs, holidays to vacations and emergency events.

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However, in your case, you will need to prove your systematic income with the support of income certificates and bank statements. There are cases where banks have the option to offer you a personal loan that is approved first based on your bank statements, credit assessment, and joint explanation.

Let's take a closer look. Let's say Adai Mishra is a 28-year-old freelance and data research professional who throws around ВЈ1, 25 lacch (average) a month. Many of the creditors believe that the monthly income threshold is only в‚№ 25. 000, so his monthly income is enough for him to apply for a personal loan.

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Furthermore, he can apply for a personal loan if his credit status is on the way and above 750. He needs to possess articles that show these for himself a person such as Aadhaar, Voter's Certificate and Income Tax Return (ITR).

If he can submit these items, he will be granted a personal loan.

Conditions to fulfill

Moreover, some banks offer pre-approved personal loans to their customers, in which case the customer does not need to submit virtually any documents.

The following are some of the preparatory criteria that should be implemented to get the right for a personal loan:

1. Income certificate or 26as for the last two years.

2. Submission of important documents such as Aadhaar and Pan.

4. Credit rating must be above 720.

5. Age must be between 21 and 65 years.

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Self-employed people should not give out payroll certificates for obvious reasons.

Existing loan

Have a good credit score (720 or above) and a loan repayment period of 12 to 60 months.

In addition, if you already have an unknown loan, the bank will now offer a promise to repay it in order to accept their conclusion about your ability to pay the new loan.

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EMI calculator

For example, if you have a monthly income of ВЈ 1, 25 and you have already paid a ВЈ 15. 000 car loan EMI, ВЈ 1 and 05 are considered pure income (deducted with the current loan).

At the same time, it is recommended that the borrower check the expected amount of EMI using the EM I-computer of the individual loan here. With this EMI calculator, you can determine the monthly burden by entering three parameters: interest rates, total loans and loans.