5 Reasons Why Personal Loans are Ideal for Self-Employed Individuals

Contrary to popular belief, a personal loan is offered not only to salaried professionals but also to self-employed individuals. Owing to the host of benefits that a personal loan brings with it, many financial institutions also offer personal loans for the self-employed. There are thousands of freelancers and business owners across India who fit into this category. They also require regular and adequate financing to meet their business requirements. That’s why banks, NBFCs, and FinTech organizations cater to this segment as well. Here, we discuss five reasons why personal loans are a good source of funds for self-employed individuals too.

1.Seamless Application Process

The best part about applying for a personal loan for self-employed is that you can do so from the comfort of your home itself. This is what attracts small and medium-sized business owners to personal loans - the convenience aspect. From filling up the online application form on your lender's website to receiving the funds in your bank account, the entire application process for a self-employed personal loan is seamless and straightforward. That's what makes it quick and easy to access as well.

Related Blog - Here’s When You May Need Personal Loans for your Business

2.Higher Loan Amount

If you're a freelancer, the first thing that comes to mind is the uncertainty and irregularity of income. Compared to your salaried friends, you don't have the security blanket of a monthly salary round the year. So, some months will be decent, some months will be excellent, and certain months will be a downright struggle. In times like this, a personal loan for the self-employed will come to your rescue and help you take care of urgent expenses. You can borrow from ₹50,000 up to ₹40 Lakhs, depending on your lender. The same can be said for business owners, depending on the nature of the business and its industry.

3.Minimal Documentation

Even for self-employed individuals, gone are the days where you had to carry a bundle of documents to your bank. Now, you no longer have to wait in a queue for a loan officer to verify your documents in person. All you need is Identity Proof (PAN, Aadhaar), Address Proof (PAN, Aadhaar, Voter ID, Passport, or Driver's License), and Income Proof (Salary Slip) documents. Once you upload the scanned copies of these documents, your lender will evaluate your eligibility for a personal loan for self-employed.

4.Flexible Repayment Tenure

Whether you’re taking a personal loan for self-employed or salaried, you must always select a repayment tenure that’s suitable for you. Consider your debt-to-income ratio and decide. On a self-employed personal loan, the term usually ranges from 12-60 months.

5.Quick Loan Disbursal

Once your lender approves your application for a personal loan for self-employed, you’ll receive the funds directly in your bank account. Depending on your lender, you can receive within just 15 minutes or up to 2 hours, maximum. Either way, in most cases, you can get the loan amount on the same day as your application if your documents are in place.

Wrap Up

The five points mentioned above illustrate the benefits of applying for a personal loan for the self-employed. While applying, just ensure to research adequately & select a lender that's most suitable for you in terms of the loan amount offered and the interest rate charged.

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