Personal loan for self-employed? Keep this in mind

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As a self-employed individual, you could require finance for a variety of personal and professional needs, such as building an inventory of handbags that your business manufactures or to finance your child’s foreign education. To ensure that you can meet the related expenses in a timely manner, it is important to identify and understand the sources of finance that you can rely on. This includes exploring a personal loan for the self-employed. With this loan, you can access a high loan amount at a low rate of interest with flexible repayment terms.

Before you file your application, take a look at some tips that you should keep in mind. This will ensure that you maximise your chances of approval.

Research loan providers

The first step in getting a good loan is selecting the right provider. To do this, research the market. This will give you an idea of the rates of interest offered by various lenders and allow you to select the best one. A lender offering one of the best personal loans for the self-employed is Bajaj Finserv. This loan offers you various benefits like quick approvals, flexible tenure, high loan amount, online account access, minimal documentation and easy eligibility.

Match the eligibility criteria
Depending on the lender you choose, you will need to match certain eligibility criteria. It is wise to check this before applying for the loan as it will help you understand if you are a good fit for the loan and so, boost your chances of getting approval. Also, understanding the eligibility criteria and then applying for a loan ensures that it isn’t rejected at a later date, which will bring down your credit score, not to mention inconvenience you.

With regards to this loan, you must ensure that apart from the right credit score, you fall within the ages of 25 and 55 years, have a business vintage of at least three years and tax returns filed for at least the past year. A chartered accountant must also audit your business’ turnover for the past year.

Borrow the right amount

It is always important to ensure that you borrow the right amount for the most effective use of the loan. Over-borrowing will result in you having to pay higher interest rates, which will decrease the loan’s affordability. Similarly, under-borrowing will not serve the purpose and will cause unnecessary delays.

Prioritise your needs

You may have various needs for finance, personal, professional or a mix of both. This may confuse you when it comes to deciding which need to finance first. In such a case, it is important to list all the things that require finance in order of priority. For example, you need to renovate your holiday home and also finance research for your video game development firm. At the same time, you also find that your business’ working capital is nearly depleted. In such a situation, boosting working capital should receive most funds. Focussing on research won’t yield any results if your business’ production comes to a halt. Similarly, renovating your holiday home will take last priority. Carrying out this exercise will help you make the best use of the loan.

Be aware of the application procedures

Completing the application procedures correctly can help you raise funds as soon as you need them. So, it is important to know about the procedure in advance. This will help you gather the documents that you need to submit and be prepared with the information that you need to fill out. Also, check if you can apply for a personal loan for the self-employed online. In a situation where you need funds quickly, doing this will help you get faster access to the loan sanction.

These are some important pointers that you ought to keep in mind before taking a personal loan for the self-employed. These tips will help you raise funds quickly and use the loan efficiently.