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Applying for a Personal loan for self employed individuals is probably the easier way to receive funding for an emergency situation. Even, such a loan can satiate your personal desires or can suffice the expenditure of your dream holidays!
Although many may consider personal loans to be a necessary evil, these can provide immense benefits.
Now, to get a personal loan, there are two sources – banks and NBFCs.
Both are considerable options, but NBFCs pamper the self-employed more when compared to banks. Moreover, NBFCs like Bajaj Finserv provide pre approved business loan offers to their existing customers making the whole process quicker.
Before checking out their website and dropping an application, you need to keep certain aspects in mind. So, here we provide you with few tips to consider before applying for a personal loan.
- File income tax returns for the last year
Filing income tax returns for your business is a must if you want to take a personal loan. This will bestow a sense of trust among the lenders and ensure that your company follows all legalities.
The reason behind this?
NBFCs check the total income from your business and other sources from an income tax return file. They also may calculate Fixed Obligations to Income Ratio (FOIR) with your last year’s income and expenditure.
- Make sure your business has at least 3 years of vintage
Before applying for a personal loan for businessman individuals, make sure your business has a vintage of at least 3 years. The more the merrier, but a minimum of 3 years is what NBFCs look for in a company prior to approving a personal loan.
Why this vintage?
A business that is 3 years old reaches a position where it attains ample credibility. Moreover, it grows to a certain level where a company achieves the power to repay a loan within time.
- Audit your business’s turnover of the last year
One of the other requirements of NBFCs to approve a personal loan to the self-employed – turnover auditing.
Financial institutions require you to have the turnover of your business audited for at least the previous year.
Auditing plays a vital role in showcasing your company details to the lender.
With such records, an NBFC would get to know your business’s income, expenditure, and profit. They would further get a broad idea about your ability to repay the loan that would be sanctioned.
- Ensure a good credit score
With a credit score of around 750 or more, you will increase your chances of receiving the personal loan for self employed individuals even quickly. Moreover, you may also get the ability to negotiate the rates of interest.
But, you don’t have a credit score of 750.
Relax, there are several ways in which you can increase your credit score. Some of them include:
- Repaying your loans within time.
- Not delaying your credit card instalments.
- Paying the full credit amount rather than the minimum one.
- Not applying for too many loans.
- Not having too many loans at the same time.
- Checking your credit score regularly.
Following these simple steps can make your credit score healthier, and make you eligible for a personal loan.
- Make sure you are taking the loan for a personable purpose
Personal loans can help you in various ways, but do ensure you have good reasons for it. Some of the common reasons for which self-employed individuals take a loan include:
- Medical emergency.
- Debt consolidation.
- Buying a car/bike.
If you have any other reasons, make sure it holds considerable importance before you apply for a personal loan.
Once you have a motive decided and have the intention to repay, head over to an NBFC website to apply for a personal loan for self employed individuals. With products like Flexi-interest only loans, certain NBFC’s offer attractive facilities compared to other financial bodies.
So, stop you wait, go and get your loan approved today!