7 Essential Personal Loan Tips for Self-Employed Applicants - HeroFinCorp

A Personal Loan is primarily given to an individual, whether a salaried or self-employed borrower, both can apply for a Personal Loan. As a Personal Loan can be used for multiple reasons, it is in great demand for resolving financial issues just in time.

Salaried people get Personal Loans quickly because of their stable income and good credit scores. A self-employed person may or may not get a Personal Loan easily depending upon their monthly income and profitability in business.

However, many people opine that it might be difficult for self-employed individuals to get a Personal Loan because of instability in business that often leads to defaulters. Like any other salaried individual, a self-employed individual can also easily avail of an instant loan at an affordable interest rate with authentic income statements assuring regularity in repayment of the loan. The interest rate may vary from lender to lender.

But there can be some flaws, and getting a Personal Loan may seem more difficult for self-employed without a solid employment record and ITR Fortunately, it is possible if you follow specific tips and tricks for a self-employed Personal Loan.

Also Read : Working Women in India - Get instant Personal Loan

7 Key Personal Loan Tips for Self-Employed Individuals Facing Approval Challenges

1. Keep your required documents updated

When self-employed individuals apply for a Personal Loan, more documents are required by the lender for repayment confirmation. The requirements vary from lender to lender. Authentication of required income documents can help self-employed borrowers to get the loan easily.

Self-employed applicants often need additional documentation to verify their income and repayment capabilities. These may include:

Ensure these documents are current and organised. It will speed up the process and improve your chances of approval. The quicker a lender verifies your financial health, the faster you get the funds.

2. Improve Your Credit Score

Prove your creditworthiness, your credit score should be impressive. If you have a low credit score, you need to build it up before applying for a personal loan. Your credit history is one of the vital factors determining your eligibility for a loan.

Your credit rating plays a significant role in determining the approval of your loan and what interest rates you will get. If your credit rating is poor, it might be worthwhile taking steps to bring it up to scratch before getting a Personal Loan:

• Pay off existing debt and stay current on payments.
• Keep your credit card use below 30% of the credit limit.
• Check your credit report regularly to maintain accuracy.

A credit score over 750 is preferable for getting the best loan interest terms. If your credit score is low, work on building it higher for better chances of approval.

Also Read: Self-Employed – Looking for loan without ITR?

3. Reduce debts

Before taking any loan, try to minimize the existing debt. If you have multiple credit cards and loans, try to reduce them before applying for any new personal loan because lenders are not ready to risk their money if you have more than one credit card and loan.

Try to reduce the outstanding debt prior to seeking any loan. If you have multiple credit cards and loans, try to reduce them before applying for any new Personal Loan as lenders do not want to risk their money if you have multiple credit cards and a loan.

Try the following to reduce your debts:

• Pay off high-interest loans first.
• Don't take on new debt before applying for a loan.
• Reduce the number of active credit cards you hold.

By reducing your outstanding liabilities, you improve your financial situation and find it simpler to secure a Personal Loan.

4. Guarantor or Co-signer

If your credit score is poor, you can take a guarantor or co-signer for availing a loan. It is one of the finest methods to secure approval. Therefore, if you do not wish to have a guarantor or co-signer, be sure that you are paying on time.

Also Read :How to Avail HeroFinCorp Instant Personal Loan in a Few Steps?

5. Secured Personal Loan

Another significant tip to get a personal loan for self-employed is to apply for a secured loan against a collateral. Keeping your vehicle, property, or gold will help in faster loan approval.

Another significant tip to get a Personal Loan for self-employed is to apply for a secured loan against a collateral. If you’re finding it difficult to get approved for an unsecured loan, consider applying for a secured loan. This type of loan requires collateral, such as:

• Your home or property
• A vehicle
• Gold or other valuables

Offering collateral can help mitigate the lender’s risk and may result in a quicker loan approval process.

6. Keep your finances in order

Maintain a record of your month-to-month earnings and make on-time payments. Keep your Income tax returns record to show the lender that you are credit-worthy and earn trust for repayment.

Lenders would like to notice that you have a stable financial situation. Maintaining a record of your monthly income and expenditures is important:

• Keep detailed records of all your income sources, such as business income, investments, and part-time jobs.
• Maintain your tax records to establish your financial stability.

Also Read : Best Instant loan app for Self-Employed

The more organised your financial records are, the easier it will be to establish your eligibility to lenders.

7. Select the best lender

Always compare and select the appropriate lender according to your requirement. Selecting the appropriate lender for your situation will facilitate hassle-free loan sanction.

While availing a loan, keep the following factors in mind to select the best lender:

• Interest Rates: Opt for competitive interest rates based on your creditworthiness.
• Loan Tenure: Select a loan tenure as per your repayment capacity.
• Prepayment Penalties: The lenders can charge penalties for prepayment of the loan; therefore, review the terms and conditions before joining.

However, HeroFinCorp, an instant Personal Loan app powered by Hero FinCorp, a leading financial services company, equally offers a loan to self-employed and salaried with minimal documentation and eligibility criteria. The loan amount available for borrowing is Rs.50,000 - 1,50,000 on an attractive interest rate.

HeroFinCorp eligibility criteria for self-employed individuals

• Age: Be between 21-58 years.
• Citizenship: Being an Indian resident citizen is a must.
• Work Experience: Minimum work experience for salaried employees is 6 months and 2 years for self-employed.
• Monthly Income: Minimum income requirements of Rs 15,000 per month

Also Read : Benefits of Taking Personal Loan for Salaried

Therefore, keeping in mind the above-mentioned 7 simple, insightful steps, a self-employed person can take a loan from HeroFinCorp instant cash loan app by downloading it from Google Play Store.

Conclusion

Applying for a Personal Loan as a self-employed person can be a challenge, but if well prepared and presented, the process can be hassle-free. With your finance statements current, enhancement of your credit rating, clearing of outstanding loan amounts, and selecting the right lender, your chances of approval are considerably increased. Remember that however you act on taking care to be financially in good shape, not only will you be assisted in getting your loan, but it will benefit your overall financial well-being too. So, grab these suggestions, and proceed with confidence in getting your Personal Loan now!

Frequently Asked Questions

1. What documents are needed for a Personal Loan if I am self-employed?

You will need Income Tax Returns (ITR) for the last 2-3 years, bank statements for the last 6 months, business registration documents, and proof of income (e.g., profit and loss statements).

2. How can I improve my chances of getting a Personal Loan as a self-employed individual?

Maintain an updated credit score, reduce existing debts, keep your financial documents organised, and consider applying for a secured loan or having a co-signer.

3. Can I get a Personal Loan if I have a low credit score?

Yes, but it may be more challenging. Consider using a co-signer or opting for a secured loan to improve your chances of approval.

4. What is a secured Personal Loan?

A secured Personal Loan requires collateral (e.g., property, gold, or vehicle). This increases your chances of getting approved, especially if you have a low credit score.

5. How long does it take to get a Personal Loan?

With HeroFinCorp, the approval process is quick, and funds can be disbursed within a few hours, depending on your application and documents.

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