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|
|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%
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|
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.
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.
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.
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.