Self-employed individuals may face a distinct loan application process. Such a different process is due to their unique financial situation. Self-employed individuals may have an unsteady source of income, which can impact their loan repayment capacity.

Banks scrutinise these situations before approving a personal loan for self-employed individuals. 

Understanding these nuances and knowing what to consider can make the loan application process smoother. It also increases the chances of approval.

What Should Self-Employed People Consider When Applying for a Personal Loan?

Self-employed individuals must consider the following factors to streamline their personal loan application:

1. Eligibility Criteria

Self-employed individuals need to meet certain eligibility criteria set by banks. These can include:

• Minimum age threshold at the time of application
• Maximum age threshold during loan maturity 
• Minimum annual net income threshold (after taxes)
• Career experience for a certain number of years after qualifications. 

2. Documentation and Proof of Income

Banks may require a different (or additional) set of documents when disbursing personal loans for self-employed people. 

Regarding income proof, the list of documents generally includes: 

• Income tax returns (ITRs) for the last two to three years
• Bank statements (for active current account and primary savings account)
• Other financial statements evidencing proof of income. 

3. Credit Score

A strong credit score is crucial when applying for a personal loan. It reflects the applicant’s creditworthiness and financial discipline. Self-employed individuals should check their credit scores before applying. They must take steps to improve their credit score if necessary. 

Some ways to boost your credit score:

• Paying off outstanding debts
• Maintaining a low credit utilisation ratio
• Avoiding late payments for credit bills.

4. Interest Rates and Fees

Interest rates for personal loans canvary. It depends on the applicant’s profile and the lender’s policies. Self-employed people might get charged higher interest rates as banks see their income as less steady. 

It is important to compare interest rates from different banks before finalising a lender. Also, be aware of other fees like processing fees, pre-payment charges, penalties for late payments, and more. 

5. Loan Purpose

A personal loan can be used for any purpose the applicant sees fit. However, sometimes, banks may have usage restrictions on the personal loan amount.

Hence, specifying the purpose of the loan can be a good idea. Some common use cases of personal loans include business expansion, managing personal expenses, or consolidating debts.

Banks appreciate applicants who can explain why they need the loan. It shows responsible financial planning. Also, when you state the loan’s purpose, you can get offers that suit your financial situation and needs.

IndusInd Bank offers a Personal Loan for various needs, such as:

• Higher education
• Home renovations 
• Wedding expenses
• Medical Emergencies 
• Travel 
• Debt consolidation, and more. 

With IndusInd Bank, you can rest assured that you will find a loan product that matches your specific requirements. You can reach out to our customer care team if you need assistance in choosing the right loan product for your needs.

Also Read: Unravelling the Link Between Employment and Personal Loan Eligibility

Conclusion

By carefully considering various factors, such as income proof, credit score, loan amount, etc., you can choose the best loans for self-employed individuals. 

IndusInd Bank provides customised Personal Loan solutions to meet the unique needs of self-employed individuals. Competitive interest rates, instant loan approvals, flexible repayment options, an entirely digital application process, etc., are some benefits we offer.

Planning your loan repayment is also easy with the help of our Personal Loan Monthly EMI calculator. 

So, what are you waiting for? Apply for a Personal Loan with IndusInd Bank today! 

Disclaimer:

The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.

A personal loan can be handy during a cash crunch. Whether it is an unexpected expense, medical emergency, or a significant life event, a personal loan can be a practical solution. When you opt for a loan, plan its repayment such that your present and future finances are both taken care of.

You can avail of long-term personal loans to make your financial burden easy. Extending the repayment period reduces your monthly obligation, allowing financial flexibility. 

Why You Should Prefer Long-Term Personal Loans for Better Finances

A long-term personal loan can be an ideal solution for those wondering how to reduce their loan burden. It offers several benefits that can make the repayment process easy. These benefits include:

1. Lower Monthly Payments

Your monthly payments become manageable if you spread your loan repayment over a longer tenure.  It frees up your income for other essential expenses, which reduces your monthly financial stress.

For instance, instead of repaying a loan over three years, extending it to five or seven years lowers the monthly outflow.

2. Better Cash Flow Management

With more available cash each month, you can save, invest, or apply your money for other purposes without straining your budget. It is helpful for people with irregular income or those planning substantial future investments.

3. Higher Flexibility in Financial Planning

Longer loan tenures help you plan your finances better. It is easy to save for big purchases, invest in new ventures, or support a comfortable lifestyle with ease with low fixed monthly payments. This predictability makes financial planning simpler and more effective.

4. Reduced Risk of Default

Long-term loans make it easier to stay on top of payments. The risk of missing a payment decreases when you take a personal loan for the long term. It is because the monthly instalment in this scenario is low. The reduced risk can protect your credit score and ensure you remain in good standing with your lender.

IndusInd Bank offers tailored Personal Loan options designed to meet your needs. Applying for an Instant Personal Loan with IndusInd Bank is easy, paperless, and entirely digital!

Also Read: Here’s Why You Shouldn’t Miss Repaying Even a Single EMI on a Personal Loan

Process of Applying for a Personal Loan with IndusInd Bank

Securing a personal loan with IndusInd Bank is straightforward:

1. Fill the Application Form

Begin by filling out the online application form available on the IndusInd Bank’s website.

2. Review Offers

You will be given a loan offer for long-term personal loans based on your details and requirements. Choose the one that fits your needs and repayment capacity.

3. Complete Virtual KYC

You can carry out the Know Your Customer (KYC) process virtually with IndusInd Bank.

4. Review Loan Agreement

After completing the KYC process, you will receive the loan agreement. This document includes the loan’s terms and conditions. Read the document carefully. If you agree with the terms, you can sign the contract digitally.

5. Receive Loan Amount

Upon approval, the loan amount is disbursed directly into your bank account.

IndusInd Bank’s customer service team is always available to assist. If you have any issues securing a personal loan for the long term, you can reach out to them.

Conclusion

Choosing long-term personal loans can help you reduce financial stress. It gives you lower monthly payments, helps you manage your cash flow better, and makes it easier to plan your finances.

IndusInd Bank provides a range of personal loan options to help you achieve financial stability and peace of mind. We also offer tools such as the Personal Loan Calculator so you can plan your repayment carefully.

Apply for a Personal Loan with IndusInd Bank now.

Disclaimer:

The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.

Personal loans are versatile financial tools that can help you cover various expenses. These can range from medical bills to home renovations. To apply for a personal loan, you must fill out a loan application form and submit it to the bank. 

This guide will walk you through the steps to fill out a personal loan application.

Steps on Filling a Personal Loan Application

To have a seamless loan application process, follow the below steps:

1. Choose How You Want to Apply

Nowadays, one can apply for a personal loan online apart from the conventional offline method. Opting for an online personal loan application helps save time and energy. It is possible to complete the entire application process within a few minutes. 

2. Check Your Eligibility

Before you fill out the application form, check if you are eligible. 

Most banks have specific requirements for personal loans, such as a minimum income level and a good credit score. To check whether or not you qualify, visit the bank’s website or contact their customer service. 

3. Ensure You Have the Required Documents

Next, make sure you have all the necessary documents. You will usually need:

• Proof of identity (such as a PAN card or passport)
• Proof of address (like utility bills or rental agreements)
• Proof of income (salary slips or bank statements). 

If you opt for an online personal loan application, you must keep the soft copies of these documents handy.

4. Complete the Application Form and Submit

The application form will ask for the following:

• Personal details (name, contact details, address, marital status, etc.)
• Financial information (income, monthly expenses, existing debts, etc.)
• Employment details (job title, employer’s name, contact details, and length of employment)
• Loan details (the loan amount, purpose of the loan, loan tenure, and so on).

Make sure to double-check all information before applying.

5. Complete Virtual KYC

Now, the bank will review your application. If everything is in order, you can complete the KYC (Know Your Customer) process. For online applications, a virtual KYC process is available.

6. Review and Sign

After the KYC process is complete, the bank provides a loan agreement. This agreement enlists all the terms and conditions of the loan. Review these terms focusing on the interest rate, repayment schedule, and any fees. If you agree with the terms, sign the agreement and return it to the bank. 

After approval, the bank will disburse the loan amount to your bank account. 

Also Read: What is the Minimum Income Requirement for Applying for a Personal Loan?

Points to Consider Before Applying for a Loan

Now that you have a clear idea of how to fill out a personal loan application, let’s look at the pointers to keep in mind before applying.

1. Evaluate your current financial situation to ensure you can afford the loan repayments. A loan EMI calculator can help in this regard. 

• Familiarise yourself with processing fees, prepayment penalties, or late payment charges beyond the interest rate of the loan. 

• Consider the impact on your credit score. Manage your credit with the responsibility to maintain a good credit score.

Conclusion

Understand each step and consider your financial health and other loan costs when applying for a loan. It can increase the chances of approval and secure a loan that meets your needs. 

IndusInd Bank allows you to apply for a loan online and get instant approval. All you need to do is fill out the online personal loan application, choose the right loan offer, complete the virtual KYC and auto repayment setup, and sign the contract digitally. After a quick approval, the money will be disbursed into your bank account. 

Fill out a Personal Loan application form with IndusInd Bank now and take the first step towards financial flexibility. Apply now!

Disclaimer:

The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.