Personal loan for self employed is a type of loan that is offered by most banks. While sanctioning the loan, borrowers must mention the purpose of the loan. Consequently the interest rates charged on these types of loans are higher than loans for salaried borrowers. The rates of interest on personal loan for self-employed varies from 13.5% to 22% a year. The loan amount advanced for personal loans can be used for any personal expenditure like home renovation, vacation, medical expenses, cosmetic procedures, marriage expenditures and other expenses.
There are some common eligibility criteria for a personal loan for self employed. The eligibility criteria vary across banks. Mentioned below are some general eligibility criteria for self employed personal loans:
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The personal loan for self employed comes at a higher interest rate than other personal loans. As these loans are given to self employed the bank might ask for collateral. The rates of interest vary from 13.5% to 24% a year and depend on the amount of loan sanctioned and the credit score of the borrower.
The documents required for self employed individuals to avail a personal loan are listed below:
As the document requirement varies from bank to bank, the bank in its capacity may ask for additional documents if deemed necessary.
The self-employed can easily avail personal loans from banks and NBFCs without any hassles. While providing loans to self employed, banks follow strict rules and some of the banks provide these loans only to individuals with a good credit score. On the other hand the NBFCs are more lenient with requirements, when providing loans to the self employed. However, the non-banking companies charge a higher rate of interest compared to banks when it comes to personal loans.
While applying for a personal loan, an individual must have a good credit score. A bad credit score can reduce the chances of a personal loan getting approved. However it is still possible for self-employed borrowers to avail a loan with a bad credit score. The banks in this case do not provide unsecured loans and generally asks for collateral to be submitted as security against the loan. The amount of loan sanctioned by the bank depends on the collateral submitted by the borrower.
Listed below are some of the factors that can affect the rates of the personal loan:
Given below are some of the features and benefits of personal loan for self-employed individuals:
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