Personal loans have always been a product well suited for individuals to meet their various personal or professional requirements. However, being a self-employed person if you wanted to avail a personal loan, then it could be even more difficult. This is because of the unsteady income, irregular cash flows and much more as the lack of structured documentation. But, this doesn’t mean that a self-employed individual can’t get personal loans.
This blog will explore the personal loan challenges self-employed individuals face in securing a self-employed personal loan and offer practical personal loan solutions to overcome them.
Here are some challenges self-employed individuals face in getting a personal loan, as well as solutions.
1. Income Instability.
Most of the time, self-employed individuals do not have regular income unlike the salaried employees who have fixed monthly salary. Because of this reason, lenders can’t be sure about self-employed people’s repayment capacity and hence they hesitate to give the loan.
Solution: Maintain accurate financial records.
this requires your well-documented financial statements, tax returns and bank account records to ensure consistent flow of income and expenses. We help and assist self employed personal loan applicants in providing the required documents to prove the case with lender.
2. Limited Credit History or Lower Credit Score
Many self-employed individuals need a better credit history because they either default on their loans or need to be made aware about how to maintain their credit score which can impact your loan eligibility.
Solution: Regularly monitor and improve your credit score.
Ruloans provides free CIBIL score through our Ruconnect App which is helping you to keep track and improve of your credit profile. The better the credit score, the chances of loan approval and best loan offers.
3. Higher Interest Rates
Lenders may think that self employed applicants are a more significant risk as they have a fluctuating income, meaning you could be quoted higher rates of interest before actually being declined an application, which is why some people will not apply for a loan when they need to!
Solution: Explore multiple lenders.
With our network of 265 plus banks and NBFCs, self employed can now compare interest rates offered by different lending institutions and choose the one which is best suited to their requirements. We offer you competitive interest rates which are lower than what is available in market when you apply online for personal loan.
4. Strict Eligibility Criteria
Lenders have strict eligibiliy criteria and hence it is difficut for self employed to qualify for personal loan.
Solution: If you feel the norms or rule are too rigid, then try applying in NBFCs or fintech lenders. They have slightly relaxed eligibility criteria and may also offer quicker approvals with minimum documentation. Ruloans DSA partners / loan agents can help you in this regard and get you to the right lender.
5. Limited Loan Amounts
The loans that are available to self-employed applicants can sometimes be lower than those for employees on salary and this is especially considering the first category to be a higher risk.
Solution: Ruloans being associated with the best banks and NBFCs in the market, help self-employed borrowers to avail higher loan amount based on their business performance and financial papers. With Ruloans you can be rest assured to get the desired loan amount as per your eligibility with loan options designed specifically for self-employed. Thus, helping self-employed individuals to get Personal Loan of their choice.
Importance of personal Loans for a self-employed individuals
A personal loan can come to the rescue of self-employed individuals. Be it for business expansion, meeting personal expenses or dealing with an emergency, personal loans offer you the much-needed flexibility and quick access to funds. Some of the benefits that a personal loan offers are:
- No Usage Restrictions: There are no restrictions on the usage of personal loans, and a borrower is free to use the funds for any requirement or financial need, be it medical expenses, business, or any other personal requirement.
- Faster Processing: Personal loans are the quicker type for obtaining the loan amount. Therefore, personal loans are better suited when you can’t afford to wait weeks or days for loan approval.
- Flexible Tenure: Personal loans come with a flexible repayment option where applicants can choose the tenure per their financial ability to repay.
Final Words!
Self-employed individuals may need help with getting personal loans. But, fret not as with the suitable personal loan options and assistance, you can quickly get over these problems. At Ruloans, we ensure that personal loans are available for all. So, even self-employed professionals are required to have flexible finances.
If you are self-employed and looking for a personal loan Ruloans is your destination. With our vast experience, number of loan products, and tie-ups with 265+ banks and NBFCs, we assure you to get the best loan possible. Download our Ruconnect App now and start your journey to secure your future!
