Personal Loan for Self-Employed

Overview

Personal Loan for Self-Employed individuals, be it self-employed professionals or businessman is complex than salaried personal loans since lender demands the borrower to have a fully established and profitable business. Hence, many lender avoid offering personal loans to self-employed such as Axis Bank and SBI.

Whereas, some lenders prefer lending to self-employed professionals over self-employed businessman and non-professionals such as HDFC Bank. However, if a borrower have a profitable business and doing consistent growth in revenues each year, then he/she can avail the funds quite easily. It is important to know that the documentation process is quite complex in case of personal loan for self-employed as compared to salaried.

Self-Employed Personal Loan at a glance
Age 18 Years to 60 Years
Minimum Income Rs. 18,000 per month or above usually
Minimum Interest Rate 10.75% per annum
Maximum Tenure 72 Months
Total Work Experience 5 Years usually
Current Work Experience Minimum 1 Year

Personal Loan Offers for Self-Employed Professionals & Businessmen

Banks/FIs Annual Interest Rates Max Amount Type of Borrower
HDFC Bank 12.50% - 15.65% Rs. 50 Lacs Professionals Only
Axis Bank 15.50% to 24% Rs. 15 Lacs Professionals & Businessman
Bajaj Finserv 14% - 18% Rs. 35 Lacs Doctors, CAs & Businessman(Existing Customers only)
ICICI Bank 10.99% - 22% Rs. 20 Lacs Doctors & Businessman
YES Bank 10.75% - 15.90% Rs. 25 Lacs
Citibank 14.99% - 16.99%
For Professionals
15.99% - 18.99%For Businessmen
Rs. 30 Lacs Professionals & Businessman
Indusind Bank 11.25% to 23% Rs. 15 Lacs Professionals & Businessman
Capital First 12% - 18% Rs. 25 Lacs Professionals Only
Indiabulls 11.99% - 26% Rs. 15 Lacs Professionals & Businessman
Home Credit 14% Rs. 2 Lacs Professionals & Businessman
IDBI Bank 13% - 14% Rs. 10 Lacs Professionals & Businessman
HSBC Bank 10.99% - 17.84% Rs. 30 Lacs Professionals & Businessman
Andhra Bank 12.20% - 13.20% Rs. 20 Lacs Professionals & Businessman
Syndicate Bank 10.30% - 13.30% Rs. 20 Lacs Professionals & Businessman
Corporation Bank 12.95% - 13.95% Rs. 3.5 Lacs Professionals & Businessman
Bandhan Bank 14% - 18.75% Rs. 5 Lacs Professionals & Businessman
Bank of Baroda 11.60% - 16.60% Rs. 10 Lacs Professionals & Businessman
Fullerton India 11.99% - 23.99% Rs. 30 Lacs Professionals & Businessman
Standard Chartered Bank 10.99% - 18.65% Rs. 30 Lacs Professionals & Businessman
Tata Capital 11.49% - 19% Rs. 20 Lacs Professionals & Businessman
PNB 12% - 15% Rs. 10 Lacs Doctors Only
Canara Bank 10.90% - 13.90% Rs. 3 Lacs
Bank of India 11.85% - 14.05% Rs. 20 Lacs Professionals & Businessman

Important Factors for Self-Employed Personal Loans Eligibility


Minimum Income

The minimum income of a self-employed borrower is a deciding factor in regards to the maximum loan amount he/she can get. In case of self-employed personal loans, the banks and financial institutions keep a check on your average monthly income which help the lender understand the credit risk from case to case. The minimum annual income of a self-employed should be at least Rs. 1.20 Lacs. The maximum annual income required to avail personal loan, can be changed from lender to lender as per their own internal lending guidelines.

Current Age

The current age at the time of loan application in case of self-employed borrowers, is comparatively higher than salaried borrowers. As per the basic criteria, most of the lender demands self-employed applicants to be at least 22 to 23 years old at the of loan application. Whereas, the maximum age of the borrower must not be above 65 years at the time of loan maturity. Unlike, salaried borrowers, the maximum age for a self-employed borrower for a personal loan, doesn’t depends upon the retirement age. However, the loan amount must have been paid in full by the time borrower reaches the maximum age criteria as predefined by the lender.

Total Experience and Stability in Profession

In case of self-employed borrowers, the total number of years one have been running the business is a deciding factors. Based on the total number of business continuity years, the lenders analyse the health and growth of the business, which represents that how long the borrower could be stable in the current profession expectedly.

A long period of business continuity represents that the borrower have been making good profits over the time and have a stable source of income. Hence, almost all the banks and financial institutions demand the borrowers to have a certain period of total experience in the current profession/occupation. It should be minimum 2 years to 3 years as per the internal guidelines defined by the lender’s criteria.

Qualification

The qualification level of a borrower is also a important factors in case of self-employed personal loans, especially if the borrower is a self-employed professional such as doctors, chartered accountants, engineers, and company secretaries etc.

Documentation


For Doctors:

  • Medical registration certification
  • Identity Proof & Residence Proof
  • Copy of Bank Statement for last 6 months.
  • Copy of latest ITR along with past 2 years income records, Balance Sheet and Profit & Loss Account as certified or audited by a chartered accountant.
  • Business Continuity proof, such as Income Tax Records, Trade License, Record of Establishment or Sales Tax Certificate.
  • Copy of any running obligations
  • KYC Documents along with latest Passport size photograph.

For Self-Employed Businessman:

  • CBusiness Existence Proof
  • Business Continuity proof, such as Income Tax Records, Trade License, Record of Establishment or Sales Tax Certificate.
  • Identity Proof & Residence Proof
  • Copy of Bank Statement for last 6 months.
  • Copy of latest ITR along with past 2 years income records, Balance Sheet and Profit & Loss Account as certified or audited by a chartered accountant.
  • KYC Documents along with latest Passport size photograph

For Sole Proprietor:

  • Business Existence Proof
  • Copy of Sole Proprietorship Declaration
  • Identity Proof & Residence Proof
  • Copy of Bank Statement for last 6 months.
  • Copy of latest ITR along with past 2 years income records, Balance Sheet and Profit & Loss Account as certified or audited by a chartered accountant.
  • Business Continuity proof, such as Income Tax Records, Trade License, Record of Establishment or Sales Tax Certificate.
  • KYC Documents along with latest Passport size photograph

For Partnership Firms:

  • Certified Copy of Partnership Deed
  • Proof of Existence
  • Business Continuity proof, such as Income Tax Records, Trade License, Record of Establishment or Sales Tax Certificate.
  • Identity Proof & Residence Proof
  • Copy of Bank Statement for last 6 months.
  • Copy of latest ITR along with past 2 years income records, Balance Sheet and Profit & Loss Account as certified or audited by a chartered accountant.
  • KYC Documents along with latest Passport size photograph

For Companies:

  • Certified true copy of Memorandum & Articles of Association as certified by Director and original copy of Board resolution.
  • Proof of Establishment
  • Business Continuity proof, such as Income Tax Records, Trade License, Record of Establishment or Sales Tax Certificate.
  • Identity Proof & Residence Proof
  • Copy of Bank Statement for last 6 months.
  • Copy of latest ITR along with past 2 years income records, Balance Sheet and Profit & Loss Account as certified or audited by a chartered accountant.
  • KYC Documents along with latest Passport size photograph