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Tuesday, April 16, 2024

Self-employed- How to become qualified for a Personal Loan

qualified for a Personal Loan

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Do you know more than half the ratio of the Indian population is self-employed? But still, it is tough for self-employed individuals to get approval for personal loans. One of the major risks behind this is the fluctuation of income.

So, how the self-employed individuals get personal loans? If you are self-employed and want to take a personal loan, you should read the article completely.

What is the eligibility criteria of a personal loan for self-employed individuals?

Being self-employed comes with some benefits and drawbacks, such as time flexibility, lack of fixed income. The lender approves the personal loan once they are sure that you can repay it.

Therefore, personal loan eligibility for salaried individuals differs from self-employed individuals. This is a list of eligibility criteria for the self-employed:

Age

The age eligibility criteria for the self-employed to avail of the personal loan may vary from one lender to another.

Credit score 

The self-employed individual must have a 750 or above credit score to become eligible for a personal loan.

Minimum net income 

The self-employed applicant from non-metro cities must have a minimum salary of INR 15,000 monthly. And the applicants from metro cities must have a minimum salary of INR 20,000 monthly.

Loan amount

As a self-employed applicant, you can borrow a personal loan amount of up to 50 lakh based on your credit profile.

Work experience

The applicant must have a business tenure of a minimum of 3 years. The self-employed individuals must have an ITR of 3 years.

How to become qualified for a personal loan?

Everyone wants to get approved for a personal loan from a lender as soon as possible. While applying for a personal loan, it is important to consider some factors to get approval easily.

Here are some questions you should ask to determine whether you qualify for a personal loan.   

How stable is your finance?

Spending within your budget is the best way to become qualified for a personal loan. As the income of self-employed fluctuates with time, the lenders must be assured that you will be able to repay the loan if you have stable finances.

How much are you safe from contingencies? 

No one has an idea what our future holds for us. So, it is important to prepare for contingencies. How do you repay the loan if you face a sudden loss in your business? One easy way to provide assurance is by showing your income proof.

Have you carried all the essential documents? 

The difference between becoming a qualified self-employed and salaried individual arises from their income source. Before giving you a loan, lenders have to assure that you earn a stable income or can repay the loan on time. For this, you must submit essential documents like income proof to the lender to qualify for a personal loan.

Conclusion

Hope you understand how you can improve your chances of getting approval for a personal loan from a lender.

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