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| 4 Tips To Grab The Best Personal Loan For Self- Employed Deals |
Almost half of the Indian
workforce comprises self-employed individuals, which a recent study estimates
to be around 473 million people.
workforce comprises self-employed individuals, which a recent study estimates
to be around 473 million people.
Running and operating your
business can be exciting, allowing greater opportunities for growth and earnings.
business can be exciting, allowing greater opportunities for growth and earnings.
However, it can also strain your
finances at times, making it harder for you to continue operations.
finances at times, making it harder for you to continue operations.
Personal
loan for self-employed people can often help deal with such situations.
Alternatively, you can opt for business loans if you are seeking funding for
your firm.
loan for self-employed people can often help deal with such situations.
Alternatively, you can opt for business loans if you are seeking funding for
your firm.
The pointers mentioned below
should aid your loan application and approval process, regardless of the type
of credit your avail –
should aid your loan application and approval process, regardless of the type
of credit your avail –
1. Build A Good Credit Score
Perhaps the most crucial
determining factor for all unsecured loans is your credit rating. CIBIL
maintains an extensive database of scores related to businesses and
individuals.
determining factor for all unsecured loans is your credit rating. CIBIL
maintains an extensive database of scores related to businesses and
individuals.
These scores act as a measure of
your creditworthiness. The higher your ratings, the better and greater loans
you can avail in the market. At any point, you must ensure that your business
credit score stays above 700.
your creditworthiness. The higher your ratings, the better and greater loans
you can avail in the market. At any point, you must ensure that your business
credit score stays above 700.
Therefore, before applying for a
personal loan for self-employed, make sure you possess the necessary scores. If
your rating is lower, you can also build the same by following these tips –
personal loan for self-employed, make sure you possess the necessary scores. If
your rating is lower, you can also build the same by following these tips –
- Avail smaller loans and repay
them on time. - Repay all your existing debt
before applying for the larger one. - Maintain a proper credit
utilisation ratio. This means you should only use around 40% of the credit
limit for your credit cards.
Note that it might take a few
months for your credit score to increase after you have followed these tips.
months for your credit score to increase after you have followed these tips.
2. Hire An Accountant To Maintain And Audit
Financial Records
Most lenders ask for financial
records when you apply for business loans. While the same may not be necessary
in the case of personal loans for self-employed, keeping such records handy
will only aid your business in the long-term.
records when you apply for business loans. While the same may not be necessary
in the case of personal loans for self-employed, keeping such records handy
will only aid your business in the long-term.
Whether you are availing the
business loan to reduce debt or for some other reason, this credit application
process tends to go better when you have audited papers for the company.
business loan to reduce debt or for some other reason, this credit application
process tends to go better when you have audited papers for the company.
Hire a chartered accountant to
determine the yearly profits from the company. The lender may want to look at
this document to understand whether you can repay the borrowed money.
determine the yearly profits from the company. The lender may want to look at
this document to understand whether you can repay the borrowed money.
3. Prepare Necessary Documents For The Loan
Regardless of the type of loan
you avail, proper documentation is vital for credit approval. Inquire about the
same with the lender before applying.
you avail, proper documentation is vital for credit approval. Inquire about the
same with the lender before applying.
Make sure you arrange the business
loan documents beforehand to limit hassle. Furthermore, if all required
papers are in order, loan disbursal occurs fast.
loan documents beforehand to limit hassle. Furthermore, if all required
papers are in order, loan disbursal occurs fast.
Some documents that are mandatory
to avail such loans include KYC, proof of the business, bank account
statements, income tax returns for the company, etc.
to avail such loans include KYC, proof of the business, bank account
statements, income tax returns for the company, etc.
Bajaj Finserv is an NBFC that
offers to fund to small businesses against only these few documents.
offers to fund to small businesses against only these few documents.
4. Provide A Guarantor
To further bolster your chances,
provide a guarantor while applying for the credit. A guarantor refers to a
person or entity that can repay the loan sum if you or your company fails to do
the same.
provide a guarantor while applying for the credit. A guarantor refers to a
person or entity that can repay the loan sum if you or your company fails to do
the same.
The guarantor acts as a form of
security for NBFCs in the case of unsecured loans. Keep in mind that failing to
repay the loan also hampers the credit score of the guarantor as well.
security for NBFCs in the case of unsecured loans. Keep in mind that failing to
repay the loan also hampers the credit score of the guarantor as well.
Choosing the right lender is
vital, as it can play a significant role in your loan availing experience.
Opting for loans from reputed NBFCs in India is always the best option when
searching for appropriate business funding.
vital, as it can play a significant role in your loan availing experience.
Opting for loans from reputed NBFCs in India is always the best option when
searching for appropriate business funding.
Following the tips mentioned
above should help you avoid rejection for your business loan application.
Self-employed people also have a plethora of options when it comes to availing
personal loans. Choose the perfect credit based on your repayment capabilities
and needs.
above should help you avoid rejection for your business loan application.
Self-employed people also have a plethora of options when it comes to availing
personal loans. Choose the perfect credit based on your repayment capabilities
and needs.