Instant Personal Loan for Self-Employed: All You Need to Know

Nov 23, 2020

Instant Personal Loan for Self-Employed: All You Need to Know

Financial support can ease a lot of situations, be it a health emergency or an additional wedding expense. A personal loan can be an element of comfort when your funds run low. Usually, personal loans require the borrower to submit a proof of income. For salaried individuals, this criterion is fulfilled simply via salary slips. However, what about self-employed individuals like entrepreneurs, doctors or freelance workers who need to borrow for personal reasons? Fortunately, instant personal loans for self-employed can come to their rescue.

What is a Personal Loan for Self-Employed Individuals?

A personal loan is usually an unsecured loan that is provided to an individual based on their income, employment history, credit score, and repayment ability. Unlike other secured loans that require a collateral, an unsecured personal loan does not have a prerequisite for a pledged asset.

These loans can be used for several purposes:

·        Medical expenses that are insured

·        School or university fees

·        Wedding expenses

·        Home renovation

·        Household purchases like furniture or appliances

·        Travel and vacation

·        Repay existing debt

·        Any other personal expenditure

When it comes to individuals who cannot submit stable income proof, like salary slips, many banks and non-banking financial institutions provide instant personal loans for self-employed in two categories: self-employed professionals and self-employed non-professionals.

Professional workers like doctors, chartered accounts, architects, or business consultants are usually considered self-employed professionals. These individuals are more likely to get unsecured personal loans that are backed by proof of minimum monthly income or past income tax papers as proof.

Non-professionals, such as entrepreneurs in the manufacturing or service industry or freelance workers in other fields will also be eligible for personal loans, though the individuals of this category may require collateral for the loan.

While a secured loan could pose challenges in the form of finding the asset to pledge, an unsecured instant loan for self-employed borrowers will entail a higher rate of interest compared to a secured loan.

Requirements

The key requirements for self-employed individuals to apply for a personal loan are:

·        Minimum Age – An individual has to be at least 21 years old to apply for a personal loan. The maximum age for borrowers is usually 65 years.

·        Stable Income – Even if you do not have a fixed income as a self-employed individual, you will have to submit proof of regular and stable income. Most financial institutions will request a copy of your gross annual receipts, invoices or any other income proof of at least 2 years.

·        Work Experience – The duration of your experience, as a professional or as an entrepreneur, also factors in for a personal loan. Borrowers need to show at least 3 years of experience to qualify for a personal loan from most institutions.

·        Income Tax Returns – You will need to submit your IT returns as a self-employed individual for at least 2 years.

·        Financial Statements – Bank statements of at least 6 months will need to be submitted to show proof of repayment capacity.

·        Credit Score - Most lenders will also need a CIBIL score of at least 750 as proof of being a creditworthy borrower in the past.

Availing a personal loan from any institution is straightforward. You fill in the application form, submit proof and once it is cleared, you will get the money in your bank account.

Gold Loan: An Instant Loan for Self-Employed People

For some self-employed individuals, gathering all documents required for a personal loan may be difficult. If you have recently started your career as a professional or are a new entrepreneur, you may not have all the documents for a personal loan.

In such instances, a gold loan scheme is a reliable alternative to traditional personal loans for self-employed individuals. A gold loan can be availed by anyone who has gold assets to pledge in return for liquid money. There are numerous benefits to a gold loan as an instant loan for self-employed individuals.

1.      Simple Eligibility

Unlike a personal loan, the documents required for availing a gold loan is not strict. Just KYC documents and gold assets are enough to secure this loan.

2.      Credit Score No Bar

For borrowers who have a low CIBIL score and cannot get a personal loan, a gold loan is a boon because it does not consider the score. In fact, a gold loan repaid on time can improve your credit score.

3.      Online Application

Often, gold loans can be applied online. Instant loan apps for self-employed individuals seeking gold loans make the process fast and efficient. Gold assets are picked up at your doorstep and the loan sanctioned shortly after.

4. Instant Sanction

Gold loans are also processed almost instantly, usually sanctioned within 24 hours after submitting your assets.

Rupeek’s instant gold loan solutions are a perfect fit as instant loans for self-employed individuals because of their easy application process, low-interest rates, flexible repayment tenure, zero pre-closure charges and doorstep pickup of assets.  Instead of following a one-size-fits-all approach, Rupeek gold loans are designed to provide the ideal fit to individual borrowers who can take out a gold loan to fulfill their requirements.

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