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  • Personal Loan for Self Employed

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  • Over 10 banks and financial institutions in the country offer personal loans to self-employed individuals. The interest rates for such loans usually start at 10.99%. Read on to know more about personal loans for self-employed individuals.

    Listed below are a few personal loans that are offered to self-employed individuals by banks and financial institutions in the country:
    Banks/Lenders Interest Rate (p.a.) Loan amount Loan Tenure
    ICICI Bank 11.25% p.a. to 17.99% p.a. Up to Rs.20 lakh 12 months to 60 months
    Fullerton India 20% p.a. to 49% p.a. Up to Rs.30 lakh Up to 48 months
    Yes Bank 10.75% p.a. onwards Rs.1 lakh – Rs.40 lakh 1 year – 5 years
    Bajaj Finserv 18% onwards Up to Rs.30 lakh As per the terms and conditions set by Bajaj Finserv
    Kotak Mahindra Bank 11.25% - 19.99% p.a. Rs.50,000 to Rs.15 lakh 1 year – 5 years
    IndusInd Bank 11.25% p.a. onwards Rs.50,000 to Rs.15,00,000 1 year to 5 years
    IDBI Bank 13% p.a. onwards Rs.50,000 to Rs.10 lakh 12 months to 60 months
    Citibank 16.00% p.a. onwards Rs.25,000 to Rs.30 lakh 12 months to 60 months
    HSBC 10.99% p.a. to 17.84% p.a. As per the lender’s terms and conditions 6 months to 60 months
    HDB Financial Services Up to 36% p.a. Up to Rs.20 lakh 12 months to 60 months

    ICICI Bank

    Benefits/Key Highlights:

    • Self-employed individuals between 28 years and 65 years of age can apply for a personal loan from ICICI Bank. Self-employed doctors over the age of 25 years can avail this loan.
    • For pre-approved customers, the loan amount will be disbursed to their account within 3 seconds.
    • The lender charges a fixed rate of interest. Thus, the interest charged will not change during the policy term.
    • Minimum documentation is required when applying for a personal loan from ICICI Bank.
    • Individuals who are interested in taking a personal loan from ICICI Bank can do so through online channels or by visiting the nearest ICICI Bank branch.
    Bank Name Processing Fee EMI (for Rs.5 lakh) Repayment Pre-Closure Charges
    ICICI Bank Up to 2.25% plus GST Rs.17,089 Rs.6,26,447 As per the lender’s terms and conditions

    *Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 3-year term at an interest of 14% p.a., with a processing fee of 2.25%.

    Penalties/Internal Charges:

    • Pre-payment charges: 5% p.a. of the outstanding principal plus GST
    • Additional interest on late payments: 24% p.a.
    • Repayment mode swap charges: Rs.500 per transaction plus GST
    • Loan cancellation charges: Rs.3,000 plus GST
    • EMI bounce charges: Rs.400 per bounce plus GST
    • Legal and incidental charges: At Actuals

    Yes Bank Personal Loan for Self-Employed

    Yes Bank offers unsecured personal loans up to Rs.40 lakh at attractive interest rates in just 60 seconds. Listed below are the key highlights of the personal loan for self-employed individuals by Yes Bank:

    Benefits of Yes Bank Personal Loan for Self-Employed

    • Customers can choose flexible repayment tenures based on their financial ability.
    • Yes Bank personal loan approval in 60 seconds.
    • Quick disbursal of the loan amount.
    • Personal loan top-up options as well as transfer of existing loans.
    • EMI payments via net banking facilities.
    Bank Name Processing Fee Pre-Closure Charges
    Yes Bank As per the terms and conditions set by Yes Bank As per the terms and conditions set by Yes Bank

    Kotak Mahindra Bank Personal Loan for Self-employed

    Offering personal loans at an interest rate starting from 10.99% with flexible tenure options, listed below are some of the key features of the personal loan scheme for self-employed individuals:

    Benefits of Kotak Mahindra Bank Personal Loan for self-employed:

    • The easy online application process
    • Minimal documentation required
    • Convenient EMI repayment options
    • Quick disbursal of the loan amount following approval
    • Prepayment option after 12 months from the disbursal of the loan
    Bank Name Processing Fee Pre-Closure Charges
    Kotak Mahindra Bank 2.5% of loan amount + GST 5% of outstanding loan amount + service tax

    Bajaj Finserv Personal Loan for Self-employed

    At attractive interest rates, Bajaj Finserv offers personal loans up to Rs.30 lakh. Listed below are some of the benefits of personal loan for self-employed individuals:

    Benefits of Bajaj Finserv Personal Loan for self-employed:

    • Self-employed individuals can opt for the flexi loan facility.
    • No collateral required to avail the personal loan.
    • Pre-approved loans with quick disbursal.
    • Access the details of the personal loan through the net banking portal.
    • Easy online application process.
    Bank Name Processing Fee Pre-Closure Charges
    Bajaj Finserv Up to 2% Up to 2% p.m.

    Fullerton India

    Benefits/Key Highlights:

    • The lender disburses approved loans in a timely manner.
    • Additional benefits are offered to existing customers of Fullerton India.
    • Fullerton India allows customers to apply for personal loans online.
    • The documentation process has been simplified for the benefit of prospective borrowers.
    Bank Name Processing Fee EMI (for Rs.5 lakh) Repayment Pre-Closure Charges
    Fullerton India Up to 6.5% of the loan amount Rs.19,095 Rs.7,12,428 As per the lender’s terms and conditions

    *Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 3-year term at an interest of 22% p.a., with a processing fee of 5%.

    Penalties/Internal Charges:

    • Collection of cash or cheque: Rs.300
    • NACH/cheque/ECS dishonour charges: Rs.30
    • Swap charges: Rs.500
    • Loan cancellation charges: Rs.1,000
    • Foreclosure charges: 3% to 7%

    IndusInd Bank

    Benefits/Key Highlights:

    • Self-employed professionals like doctors, chartered accountants, engineers, company secretaries, MBA consultants, and architects and self-employed individuals like directors, sole proprietors, and partners can apply for this loan, provided they are above the age of 25 years.
    • The lender has simplified the personal loan application process, with applicants having to submit minimum documentation when applying for a loan from IndusInd Bank.
    • The lender offers doorstep service.
    • Applicants do not have to have a guarantor to apply for this loan. Applicants also need not submit any collateral.
    • The lender offers a balance transfer option.
    • Speedy disbursal of loans is offered.
    • Pre-payments can be made after 6 EMIs are paid.
    Bank Name Processing Fee EMI (for Rs.5 lakh) Repayment Pre-Closure Charges
    IndusInd Bank Up to 2.5% of the loan amount plus tax Up to 16,607 Rs.6,07,858 As per the lender’s terms and conditions

    *Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 3-year term at an interest of 12% p.a., with a processing fee of 2%.

    Penalties/Internal Charges:

    • Pre-payment charges: 4% of the outstanding principal
    • Payment dishonour: Rs.450 plus tax
    • Personal loan duplicate statement charge: Rs.250 plus taxes per event
    • SI/ECS/Cheque swapping charges: Rs.500
    • Loan rescheduling or rebooking charges: Rs.1,000 plus taxes per event
    • Loan cancellation charges: Rs.1,000 plus taxes per event
    • Penal charge: Rs.150 per taxes, per EMI delay over 5 days
    • Legal charges: As per actuals
    • Stamp duty: As per the laws of the state

    IDBI Bank

    Benefits/Key Highlights:

    • Individuals over the age of 21 years can avail a personal loan from IDBI Bank.
    • All borrowers will be covered under a complimentary personal accident insurance policy.
    • Borrowers who have repaid at least 12 monthly EMIs, without defaulting on these payments, will be eligible to take a top-up loan.
    • Pre-payments are allowed 6 months after the loan amount is disbursed, without the applicant having to pay a pre-payment charge.
    Bank Name Processing Fee EMI (for Rs.5 lakh) Repayment Pre-Closure Charges
    IDBI Bank As per the lender’s terms and conditions Rs.17,089 Rs.6,15,197 As per the lender’s terms and conditions

    *Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 3-year term at an interest of 14% p.a.

    Penalties/Internal Charges:

    • Pre-payment/foreclosure charges: 2%% of the outstanding amount

    Citibank

    Benefits/Key Highlights:

    • The loan amount will be disbursed to your account in just 48 hours.
    • The lender charges a fixed rate of interest.
    • If you require additional funds, you can submit an application for the same to the lender.
    • For self-employed non-professionals, an interest rate between 17.99% and 18.99% is charged if the loan amount is under Rs.9.99 lakh. If the loan amount is over Rs.10 lakh, an interest rate between 17.49% and 18.49% is charged.
    • For self-employed professionals, an interest rate between 17% and 17.99% is charged if the loan amount is under Rs.9.99 lakh. An interest rate ranging between 16% and 16.99% will be charged if the loan amount is over Rs.10 lakh.
    Bank Name Processing Fee EMI (for Rs.5 lakh) Repayment Pre-Closure Charges
    Citibank 2% to 3% Rs.17,826 Rs.6,51,749 Up to 4%

    *Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 3-year term at an interest of 17% p.a., with a processing fee of 2%.

    Penalties/Internal Charges:

    • Booking fee: Up to 3% of the loan amount that is sanctioned
    • Late payment charges: Nil
    • Stamp duty: As per the laws of the state

    HSBC

    Benefits/Key Highlights:

    • The lender offers loan transfer facility from any other bank in the country.
    • HSBC processes loans quickly and disburses the loan amount into the applicant’s account without delay.
    • Individuals who wish to apply for this loan can do so online.
    • Customers of HSBC can apply for personal loans if they reside in Ahmedabad, Chandigarh, Bengaluru, Cochin, Chennai, Coimbatore, Jaipur, Hyderabad, Mumbai, Kolkata, Pune, New Delhi, and Vizag.
    Bank Name Processing Fee EMI (for Rs.5 lakh) Repayment Pre-Closure Charges
    HSBC Up to 1% of the loan amount that is disbursed Rs.16,847 Rs.6,11,491 As per the lender’s terms and conditions

    *Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 3-year term at an interest of 13% p.a., with a processing fee of 1%.

    Penalties/Internal Charges:

    • Fore-closure/partial pre-payment charges: Up to 3.75% of the outstanding principal
    • Cheque return charge: Nil
    • Cheque swap charges: Nil

    HDB Financial Services

    Benefits/Key Highlights:

    • This loan can be availed by self-employed professionals, such as chartered accountants, doctors, company secretaries, and architects, self-employed individuals like partners, directors, and sole proprietors, and self-employed private companies and partnerships.
    • To avail this loan, the applicant has to be over 22 years of age.
    • The lender offers a quick and hassle-free application process and allows online applications.
    • The lender offers doorstep service.
    Bank Name Processing Fee EMI (for Rs.5 lakh) Repayment Pre-Closure Charges
    HDB Financial Services 2% Rs.18,582 Rs.6,78,945 As per the lender’s terms and conditions

    *Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 3-year term at an interest of 20% p.a., with a processing fee of 2%.

    Penalties/Internal Charges:

    • ECS/cheque bounce charges: Rs.750
    • Interest on delayed EMI payments: 3% on the overdue EMI amount or the interest amount
    • ECS/PDC swap charges: Rs.750 per swap
    • Statement of account charges: Rs.500
    • Document retrieval charges: Rs.750
    • Additional repayment schedule: Rs.500
    • Loan cancellation charges: Rs.1,000

    Eligibility Criteria

    To avail a personal loan, self-employed individuals will need to meet the eligibility criteria listed below:

    • You will have to be at least 22 years of age.
    • At the time of the maturity of the loan, the applicant should not be more than 65 years.
    • The minimum annual income of the individual should be Rs.4.8 lakh.
    • The applicant should have at least 4 years of post-qualification work experience.
    • Self-employed non-professionals should have a minimum turnover of Rs.40 lakh, while self-employed professionals should have a minimum turnover of Rs.15 lakh.
    • Self-employed professionals should have a minimum profit after tax of Rs.2 lakh.
    • The individual’s business should have been running for at least 5 years. This condition may be relaxed if the applicant is a doctor.
    • Certain lenders may require applicants to have a relationship with them before applying for a loan.

    *Note: The eligibility criteria will vary from lender to lender.

    Documents Required

    When applying for a personal loan, you will need to submit certain documents along with your loan application. The documents that are commonly requested by banks and financial institutions in the country along with personal loan applications are as follows:

    • Proof of identity: Applicants can submit their driving licence, passport, voters ID, PAN card, etc.
    • Address proof: Applicants can submit their utility bills, ration cards, licence and leave agreement, valid passport, sales tax certificate, etc.
    • Bank statements of the applicant’s current account of the last 6 months
    • Proof of qualification (highest professional degree will have to be submitted)
    • Income tax returns of the last 2 years with a computation of income
    • Profession continuity proof
    • Proof of age
    • Address proof of the applicant’s office

    *Note: This is a generalised list of documents that you may be asked to submit. Your lender may request additional documents, which will have to be submitted for your loan application to be considered.

    Features and Benefits of Personal Loan for Self-employed Persons

    Listed below are the features of personal loan for self-employed borrowers:

    • Self-employed professionals and self-employed individuals can avail a personal loan from a reputed lender in a hassle-free manner.
    • Competitive interest rates are offered by lenders.
    • Loans are processed quickly.
    • The loan amount can be used for personal or business-related expenditures.
    • Flexible repayment options are offered.
    • No collateral, security, or guarantor is required to avail personal loans.
    • The application process is hassle-free.
    • Transparency is guaranteed by most lenders.
    • Some banks offer additional benefits like personal accident insurance with the loan.

    Things to Consider When Applying for a Personal Loan As A Self-Employed Individual

    If you are a self-employed individual and are in need of funds, you can apply to a bank or a financial institution for a personal loan. A number of lenders, currently, offer personal loans to both salaried and self-employed individuals. If you are looking to take a personal loan, make sure to consider the following points:

    • Eligibility Criteria: Lenders may have varied eligibility criteria with regard to the income, age, business stability, etc., of the applicant. In order for your application to be considered, you should ensure that you meet the lender’s eligibility criteria.
    • Credit Score: Your credit score is one of the primary factors that is taken into consideration by lenders when deciding whether to approve your loan application or not. Since self-employed professionals may not have a steady source of income, the concerned individual’s credit score is taken as an indication of their repayment capacity and credit-worthiness.
    • Interest Rate: The interest rate charged for personal loans is not standardised across lenders. Thus, it is in your best interest to compare the interest rates charged by various lenders before availing a personal loan. Make sure to opt for a loan for which the interest rate is not too high, provided that the other terms and conditions of the loan are favourable, as well.
    • Costs Involved: In addition to the interest that is charged on the loan amount, lenders may levy a number of other costs such as the processing fee, pre-payment charges, payment dishonour fee, loan rescheduling charges, penal charges, legal charges, etc. Cumulatively, these charges can increase the cost of your personal loan. Therefore, when comparing various personal loans, make sure to also check the other costs levied by respective lenders.
    • Existing Relationship: Certain lenders may require you to have an existing relationship with them for you to be able to apply for a personal loan. Also, if you have an existing relationship with the lender, it is likely that the lender may charge you a lower interest. Thus, if you have a savings bank account, make sure to check if your bank is willing to offer you more favourable terms than other lenders.
    • Financial Requirements: When it comes to personal loans, it is vital that you don’t borrow more than what you require. Also, you shouldn’t opt for a loan amount that is below your requirement since you may not be able to apply for another loan soon after the first loan is approved and disbursed. Hence, you should make sure that you carefully assess your financial requirements before opting for a particular loan amount.
    • Repayment Capacity: Given that you may not earn a steady source of income, it is vital that you consider your repayment capacity before applying for a personal loan. The repayment for most personal loans is done through Equated Monthly Installments (EMIs). Thus, you should ensure that you have the required funds to pay the EMIs as per schedule.

    How to Apply for a Personal Loan for Self-Employed Individuals?

    If you require funds to meet any personal or business requirements, you can avail a personal loan. Self-employed individuals can choose to apply for a personal loan through the lender’s website, through a third-party financial services website, or by directly visiting the lender’s branch.

    To apply online, through the lender’s website, you will need to first key in certain data and check your eligibility. Post this, you can proceed to apply for a personal loan through the lender’s website. Most lenders will have an online application form on their websites, which you can fill up and submit online, after which a representative from the bank or financial institution will contact you.

    If you are looking to apply for a loan through a third-party financial services website like BankBazaar.com, you will need to navigate to the respective website, compare various loans that are listed, check your eligibility, and apply for a loan of your choosing online. In this case, all documents can be submitted online, making the transaction completely paperless.

    You can also locate the nearest branch of a lender and visit the branch to apply for a loan. If you wish to apply through a branch, you should ensure that you carry copies of the required documents.

    FAQs

    1. Is there any benefit to applying for a personal loan online?

    Applying for a personal loan through online channels is more hassle-free and convenient in comparison to visiting the branch of a lender to apply for a personal loan. When you apply for a personal loan online, you can submit the loan application from anywhere, and at any time, based on your convenience.

    Also, most lenders allow applicants to upload the required documents online, thus making the transaction paperless. The processing time and approval time is also likely to be a lot quicker when you apply for a personal loan online. You can also apply for a personal loan through a trusted third-party financial services website, which will give you the added benefit of comparing various personal loans offered by different lenders on the same webpage.

    2. What is the processing fee?

    Lenders charge a one-time processing fee on the loan amount. The processing fee is a certain percentage of the disbursed loan amount, and this sum will usually be deducted from the loan amount before it is disbursed into your account. The processing fee can vary from 1% to up to 6.5%, based on the lender’s terms and conditions.

    3. Is there any limit to the number of times that I can make pre-payments?

    The number of times that you can make pre-payments towards your loan will vary based on the lender’s terms and conditions. If you intend to make several pre-payments during the loan tenure, you should check whether the lender has any limit with regard to this.

    4. Can I postpone the EMI payment date?

    No, most lenders will not allow borrowers to postpone the EMI payment date. When you borrow a personal loan, you should ensure that you pay the EMI amount within the specified date. If you miss an EMI payment, your credit rating may be adversely affected.

    5. Can I opt for a floating rate of interest when applying for a personal loan?

    Most lenders will charge either a fixed rate of interest or floating rate of interest. Thus, you may not be able to opt for a floating rate of interest if this option is not provided to you. Make sure to compare the type of interest charged by different banks and financial institutions before applying for a personal loan.

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