To follow and chase your own dream gives you a kick to outperform. But sometimes, we are caught up and worried considering the challenges it brings. If you want to fulfil your desire of becoming an entrepreneur by starting up a small venture and probably making it big in the future, you must look for stable and secure financial support. 

Personal loans allow you to establish and operate your business with all the freedom you need. Personal loans for self employed individuals support you till you become independent and establish a name for yourself. In short, a personal loan is the best answer for those intending to become self-employed individuals.

Personal Loan

A self-employed person is a sole proprietor of their business. These individuals hardly work on a fixed monthly salary basis but manage their personal expenses by taking the profit made by the company. The more independent venture owners work and toil, the higher the pay out. The personal loans support millions of people who wish to become first-time entrepreneurs.

Due to the easy availability of loans like this and increasing help from the government and private sector banks, self-employment is rising in India. It offers a range of benefits to the country such as raising the per capita income, creating more jobs, boosting the economy,etc.

Whether you are a chef and want to start a restaurant, or you are a writer who wants to publish your book, you can easily apply for a personal loan. Even traders and investors can get loans and repay the same in easy EMIs. Professionals like lawyers, teachers, doctors, independent contractors, etc. who want to start their own firms, schools, clinics, and organisations respectively can benefit from the personal loan.

Let us know more about Personal loans for the self employed. 

Self-employed Personal Loan

If you are wondering that since you do not get a fixed monthly salary, you will not be eligible for a loan, then you are mistaken. The personal loan is also approved for the self-employed.

P2P lending platforms such as the non-banking credit market is a concept of lending money to eligible candidates on a large scale. This P2P lending platform connects borrowers and lenders online. If you are on the lookout to get capital from a big network of peers, this option can be considered.  

For self-employed individuals, a business loan seems to be the best solution. There are a number of lenders who provide easy loans and charge just a nominal rate of interest. As you know, the interest needs to be paid by the borrower to the lender. This is the price of getting funding from the lenders. When you pay the EMIs, you pay the principal amount as well as the interest amount. Since the lenders get regular EMIs including the interest amount, it is a profitable proposition for them and a regular source of income too.

You can apply for a personal loan if you are a self-employed individual. The personal loan can be taken for many different purposes such as business funding, buying a home appliance, wedding loan, etc.

Eligibility for Self-Employed Individuals

Now, one of the vital things to ascertain is whether as a Self Employed Individual you are eligible for a personal loan or not. Here is the eligibility criterion list of Personal loan for the self employed for you to refer to:

1. Age

In the case of the self-employed person, the minimum age set by most lenders is 25 years. To get your loan application approved, you must be more than 25 years and less than 55 years old.

1. Business Type

One of the criteria to check before applying for a personal loan is how lucrative your business is. The lender needs to assess the dentist who is doing an independent practice and a teacher who is running its teaching centre. The lending platforms check whether you earn fairly well or not from your business. The lenders also consider the stability check before investing their money. The borrower must be able to pay the EMIs even in the off-season.

1. ITR

Income tax return or revenue is another eligibility criterion. It is important for the applicants to file ITR in their name. It shows the confirmation that you have taken a certain amount of income home. One of the most critical factors checked by the lending platforms, this is a must-consider point at the time of extending a business loan. It is also imperative for the individuals to have at least 1 year of ITR in the past year. They may also need the last six months of a bank statement.

Wrapping up

A personal loan is one of the most popular ways to manage your financial needs. Easy to apply, use, and avail, it has become a leading choice for self-employed individuals who do not have collateral to submit.