7 Tips to Grab the Best Personal Loan Deal if You’re Self-Employed
If a recent study is to be believed, a little over half the workforce in India is self-employed. This does not come as a surprise, considering that the corporate culture has only recently entered the Indian economy, which has been ruled by entrepreneurs and professionals for a very long time. Moreover, being self-employed comes with its own set of benefits, one of which is growing at a comfortable pace, while on the way to attaining high levels of success.
Of course, running an enterprise or a successful practice does require a wide array of resources, money being an important one amongst them. It is for this reason that business owners, as well as professionals, often look forward to taking Personal Loans every now and then. However, it is easier said than done, as banks are often more inclined to offering such loans to salaried individuals who are attached to reputable organisations.
Thankfully, you need not get worried about being turned down when you are in desperate need of some additional funds! All you need to do is follow these simple tips, and rest assured that your application for a Personal Loan for self-employed will get a green signal, right in the first go!
1. Keep Your Financial Records
A vast majority of professionals, as well as business owners, often find themselves lost, when it comes to keeping track of their expenses and revenues. Make sure you don’t fall in this category and maintain your account books meticulously. Your lender will want to go through your financial history, before approving your loan. Hence, it will be in your interest to maintain the following documents:
- Proof of Business/Practice
- Bank Statements
- Profit and Loss Statements
- Income Tax Returns
2. Have a Reasonable Credit Score
As a professional, you may get into the habit of working on cash basis and have no credit history at all. This can prove to be somewhat deterrent when the lender wants to review your creditworthiness. Hence, it is best that you make use of at least one Credit Card regularly, and pay its bills on time. Having small credits such as Car Loans that are being repaid on time can also work in your favour. The idea is to have a minimum score of 750 before filing your application.
3. Have an Efficient Business Plan Ready
If you wish to procure a loan for the purpose of establishing or expanding a business, an excellent way to convince the bank of your ability to repay the loan is to present them with a realistic plan. While you must have promising financial projections, you should also incorporate variables such as external factors and market trends that may prove to be a hassle. Only when the lender is sure that your business plan has potential, and will come off as profitable even in the face of adversity, will they show an inclination towards approving the loan.
4. Get Rid of Your Existing Debts
If you wish for the lender to see you as a responsible borrower who practices financial discipline, you must wrap up all your existing loans before applying for a new loan. This will help them see your ability as well as willing to repay your debts, thus moving the needle in your favour.
5. Seek Assistance from an Expert
The best way to prove your creditworthiness to banks and non-banking financial companies (NBFCs) is by offering them the audited papers from previous years. To do so in a professional manner, you ought to seek the services of a qualified chartered accountant, who can offer a yearly review of your business.
6. Choose Your Bank Carefully
This may come as a surprise to you, but you ought to know that some lenders simply don’t offer loans to self-employed professionals to avert risk, while there are others which readily do so. It’s in your best interest to send your application to a bank, who is known to offer hassle-free loans to self-employed people. Not only will it help you save your precious time, but will also help you procure the much-required sum of money in a hassle-free and quick manner.
7. Offer a Guarantor
While the tips mentioned above may prove to be of help in case you wish to Apply for a Personal Loan, however, if you have no credit history to show it is best that you apply with a guarantor who boasts a high credit score. The guarantor can be anyone, right from your family member to your friend, or even an acquaintance who is willing to back you up. Of course, doing so will largely increase your chances of getting quick loan approval, but you must understand that if you default on the payments, it will adversely impact the credit history of your guarantor. Hence, make sure that you pay you each and every EMI on time!
We hope that you are now aware of some of the simple measures that you can take when you apply for a Personal Loan for self-employed. We are sure once your loan amount is disbursed, you will be able to attain your admired level of success sooner rather than later.
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