Personal Loans for Self-Employed

For entrepreneurs seeking financial support, personal loans tailored to business needs are a promising avenue. These loans offer competitive interest rates, simplified application procedures, and adaptable repayment options. No need for collateral or guarantors, and most lenders maintain transparency about terms and charges. Some even provide additional benefits such as personal accident insurance. It's a practical financial solution designed to support business leaders on their journey to success. 

Features and Benefits

When considering a personal loan for your business, the advantages are noteworthy. Here are some:

  • Streamlined application process with reputed lenders
  • Quick processing times for efficient loan approval
  • Competitive interest rates for cost-effective borrowing
  • Versatile use of the loan amount for personal or business-related expenditures
  • Flexible repayment options tailored to individual preferences
  • No requirement for collateral, security, or a guarantor, to enhance accessibility
  • Transparent communication of loan terms and charges by most lenders
  • Supplementary benefits like personal accident insurance offered by some banks along with the loan

Comparison of Personal Loans for Self-Employed Individuals

Different banks in India provide personal loans for business owners, and the interest rates may vary based on your financial history. Your personal details and creditworthiness affect these rates. Here, we've shared the current interest rates for personal loans for self-employed individuals from top banks in simple terms.

Lenders  Interest Rate (p.a.)
Axis Bank 10.49% onwards
IndusInd Bank 10.49% onwards
IDFC First Bank 10.75% onwards
HDFC Bank 10.50% onwards
ICICI Bank 10.65% onwards
Kotak Mahindra Bank 10.99% onwards
Tata Capital 10.99% onwards
Bajaj Finserv 11.00% onwards
Federal Bank 11.49% onwards
DMI Finance 12.00% - 40.00%
Piramal Finance 12.99% onwards
Aditya Birla 13.00% onwards

Eligibility Criteria for a Personal Loan for Self-Employed

The eligibility criteria for a personal loan for business owners may vary from one lender to another. However, the following are the typical eligibility criteria you can expect as a self-working individual applicant for personal loans.

  • Nationality: You must be an Indian
  • Age: Your age must fall somewhere between 21 to 65 years old.
  • Occupation: Self-employed individuals are eligible.
  • Income: The minimum income requirement may vary from Rs. 15,000 to Rs. 40,000 per month, depending on the lender and the loan amount.
  • Business History: You must have a minimum experience of at least 2 years with your business.
  • Credit Score: You must have a good credit score of at least 700 or above.
  • Documentation: You must have a valid identity proof, address proof, income proof, and proof of end use of the loan amount.

Charges and Fees

When getting a business loan, watch out for upfront fees, usually between 1% to 5% of the loan. Make sure you pay your monthly instalments on time to avoid extra charges. Also, some lenders might charge you if you want to pay off your loan early. Always check and understand these fees before making decisions.

Documents Needed

When applying for a personal loan for a self-employed individual, you need to provide the following detailed documents:

Identity Proof & Address Proof:

  • PAN Card (mandatory)
  • Aadhaar Card
  • Valid Indian Passport, Driver’s License or Valid Voter ID
  • Utility bills
  • Ration cards

Income Proof:

  • RBI Approved Account Aggregator Process/Bank statements for 6 months 

Other Documents: 

  • Highest professional degree
  • Income Tax return of last 2 years with income computation
  • Proof of business or GST number

Frequently Asked Questions (FAQs)

What is the Cibil score requirement for a self-employed loan?

To qualify for a self-employed loan, ensure you have a CIBIL score of 750 or above.

How do I qualify for a self-employed loan?

To qualify for a self-employed loan, ensure your business has been running for at least three years, and you’re between 25 and 65 years old. Provide necessary documents like PAN card, Aadhaar card, business proof, and income proof for a higher chance of approval.

What is the age limit for a self-employed personal loan?

Personal loan for a self-employed, the age requirement is between 25 and 65 years.

How much Personal loan can a Self-employed get?

Self-employed individuals can typically get personal loans ranging from ₹50,000 Thousand to ₹1 Cr, subject to meeting eligibility criteria such as business stability, age, and income. 

How do I get a 50K Self-employed loan?

For a ₹50,000 self-employed loan, ensure your business runs for at least three years. Apply online at IDFC FIRST Bank, submitting your PAN Card, Aadhaar, and bank statements. Upon approval, the funds are deposited directly. Understand repayment terms and contact customer care if needed.

Urban Money