Can a Housewife Get a Personal Loan to Start a Business?

Personal Loans have gained unmatched popularity in recent years, and not without some valid reasons. Firstly, the loan amount procured can be used for any purpose, as deemed fit by the borrower. Secondly, Personal Loans are effortless to get approved for and are accompanied with quick disbursals. Thirdly, and most importantly, Personal Loans are unsecured, implying they do not need the borrower to offer any collateral against the loan amount.

However, it is this very reason that these loans increase the risk propensity for the lender since they do not have any asset to fall back on, in case of delayed payments or defaults by the borrower. This increased risk leads the lenders to charge a higher interest rate. Besides, it also accounts for some stringent eligibility criteria for Personal Loans, which include: 

• Identity Proof: In the form of government-issued identification such as an Aadhaar Card, Driving Licence, Birth Certificate, Passport, Ration Card, and so on.
• Proof of Age: In the form of a government-issued ID, with the date of birth clearly indicated.
• Verification of Employment: In the form of an Employment Letter from the employer (for salaried individuals), Registration of Business (for business owners), or Professional Certificate and Registration Documentation (for self-employed professional).
• Proof of Income: In the form of a recent salary slip or current salary certificate, Banks statement for the last three months and the latest copy of Form 16 – for salaried individuals.

For business owners and self-employed professionals – Income Tax Returns Statement for the previous two years. This statement should be accompanied by the Computation of Income, Profit and Loss Account, Balance Sheet as well as an Audit Report as well as Bank Statement for current as well as savings accounts for the last one year, act as proof of income.

Here, the Proof of Employment and that of Income play a significant role, since they indicate the willingness and the ability of the borrower to repay the loan.

If you happen to be on the lookout for a Personal Loan for housewives to start your business, you may not have a proof of employment or of income to prove your willingness to repay the loan in a timely manner. In such a situation, the best way for you to procure the necessary funds is to find a co-applicant for your loan. Your husband, parents, siblings, and even your children can become your co-applicants provided that:

• They enjoy a stable employment
• They can furnish ample proof of a steady stream of income
• They have a good credit score, preferably 700 and above
• They do not have multiple debts under their name

While applying for a Personal Loan with a co-applicant can make it exceedingly easy for you to get an approval, you must remember that you must repay the equated monthly instalments (EMIs) on time, without any delays or defaults. Any discrepancy in the repayment schedule may result in a blow in your co-applicants score. Not only will this prove to be detrimental to their credit health, but may also lead to unwanted tensions between you two. Besides, in case of a default, the co-applicant will be held accountable, and the lender may seize their assets. To avoid this, you must ensure an efficient and fool-proof repayment practice.

If, however, you are unable to find a co-applicant for your Personal Loan requirements, you can avail the needed funds, under the Mudra Yojana for Women spearheaded by the Government of India. This scheme was designed to empower the women of the nation and offers them with a loan amount ranging from Rs. 50,000 to Rs. 10 Lakhs, without any collateral. If the loan amount exceeds beyond Rs. 10 Lakhs, up to Rs. 50 Lakhs, you would need to pledge an asset of fair market value.

We hope that you are now aware of some of the most promising ways in which you can avail a Personal Loan for housewives.