Qualifications and Documents Required for a Personal Loan for the Self-Employed

Posted on Tuesday, August 27th, 2024 | By IndusInd Bank

Getting a loan can be challenging if you work for yourself. Banks usually prefer lending to people with regular income. However, personal loans can be an ideal refuge. They offer a way for self-employed individuals to get the financial support they need. 

However, the qualifications and documents required for a personal loan for self-employed personnel can differ from those on a salaried payroll. Further, they can also differ between self-employed individuals (e.g., business owners) and self-employed professionals (e.g., lawyers, doctors, architects, etc.)

This article explains what a self-employed person needs to qualify for a personal loan and what documents you will need to apply. 

Qualifications to Apply for a Personal Loan for the Self-Employed

First, let’s look at the eligibility criteria/qualifications needed for a personal loan for the self-employed: 

For Self-Employed Individuals:

• You must be at least 25 years of age to apply. Your age at loan maturity should not exceed 65 years. 
• You must have a minimum of 5 years of post-qualification experience. 
• Your minimum annual net income, post-tax, should be ₹4.8 lakhs.

For self-employed professionals, the age and income criteria remain the same. However, a self-employed professional must have at least 4 years of post-qualification experience.

In addition, a good credit score is crucial for loan approval and favourable interest rates.

Documentation for a Personal Loan for the Self-Employed

Here is the list of documents required for a personal loan for self-employed individuals and professionals:

1. Application Form: Duly filled-out application form with a recent photograph attached.

• Identity Proof: Self-attested photocopies of PAN card, Aadhaar card, Passport, Driving Licence or Voter ID.

• Income Proof: Last 3 years’ Income Tax Returns (ITRs). 

• Bank Statements: Bank statements of practice/business current account for the last 6 months and 3 months’ primary savings bank statement. 

• KYC documents: Valid identity/residence/signature proof.

In addition, the bank may also require business proof-related documents for you to be eligible for a personal loan.

Please note that you can apply for a personal loan of up to ₹5 Lakh from IndusInd Bank online. The process is completely digital and you do not have to furnish any documents.

Benefits of Personal Loan for the Self-Employed

As a self-employed person, you can enjoy the following benefits by applying for a personal loan:

1. Flexibility of Use

Personal loans come with great flexibility. You can use the funds for various expenses, such as business expansion, debt consolidation, or personal expenses.

2. Improve Business Growth

With a personal loan for the self-employed, you can invest in equipment, inventory, or marketing to expand your business. You can also cover operational expenses during slow periods or unexpected financial challenges.

3. No Collateral Required

Personal loans are unsecured, meaning you do not need to pledge any assets as collateral.

4. Quick Disbursal

The lender disburses personal loans quickly upon approval. This helps you receive timely financial assistance during personal or professional emergencies. 

5. Improved Credit Score

Successfully repaying a personal loan can help improve your credit score. This can enhance your creditworthiness for the future. 

6. Personal Expenses

A personal loan for the self-employed can be used for non-business-related expenses as well. One can use it for home renovation, education, or travel, among other things.

IndusInd Bank understands the unique financial needs of self-employed people and offers competitive personal loan options for your specific requirements. You can even utilise our user-friendly Personal Loan Calculator to estimate your EMIs and plan your finances with ease.

Also Read: How to Use Personal Loan for Career Development

Conclusion

Securing a personal loan as a self-employed individual does not have to be an uphill battle. By understanding the qualifications and documents and partnering with a supportive lender like IndusInd Bank for your Personal Loan, you can access the financial resources needed to achieve your goals. 

Apply now for a Personal Loan with IndusInd Bank to take the next step towards your financial goals! 

Disclaimer:

The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.