A Guide to take Personal Loan for Self-Employed Professionals

The personal loan is a very attractive form of the loan and it is required many times in one’s life. It may require to down payment for buying a home, a car or to spend a foreign tour. Sometimes people take personal loan due to some medical or other urgencies. You can have your contingency amount in a liquid fund so that you don’t have to take a personal loan.Moreover, this type of loan does not need any guarantee, paperwork, verification. The approval of loan is fast processed and you will get your money quickly in your account. That’s why this loan is so popular among the people who need quick money to fulfill their wish.

Eligibility Criteria:

There are no stiff guidelines for personal loan eligibility. However, every bank and financial organisations have their own set of rules or screening mechanism to disburse the loan. The common guidelines which are sought by almost every loan provider are as per the followings

  • Individuals between 21 and 60 years age
  • The person should be a salaried employee. Some organisations give loans to self-employed professionals such as CAs, Doctors, Lawyers etc.
  • The salary from the employer should be min Rs 15000.
  • The individual is in the job for a minimum of last one year.
  • Maximum loan amount you can get via personal loan is Rs 50 lakhs
  • Even a low credit score of below 750 may not be a constraint for the personal loan if you are agreeing to sail out more with a higher rate of interest.

Documents Required:

Generally, the following documents are required to process a personal loan

  • Identity proof such as Voter I card, Pan card, AADHAAR card etc.
  • Address proof such as Voter I card, Electricity Bill, AADHAAR card etc.
  • Last month salary slip
  • Last 3-6 months bank statement
  • Passport photograph
  • Proof of business for self-employed professionals

 Eligibility of Personal loan for self-employed Professionals:

The eligibility criteria such as salary and employment tenure are not applicable for self-employed professionals. The Bank or NBFCs (Non-Banking Financial Companies) see the repayment capability of those professionals. In this case, two years Income Tax return may suffice the purpose of disclosing the income.

Self-employed professionals must have minimum three years’ experience to be eligible for the personal loan.

Also, read about the factors on which the loan approval depends.


You can check your personal loan eligibility through the calculators present in the respective banks’ website such as HDFC, ICICI, AXIS etc. You can also compare the interest rates and check the eligible amount on Bankbazar, Paisabazar etc which are aggregating between customers and banks.

Document Required:

The following documents are required for personal loan for self-employed professionals

  • Proof of Identity
  • Proof of Address
  • Last 6 months bank statement
  • Passport photographs
  • Office address proof
  • Audited financial statement of business
  • Proof of continuation in business

Can it be for self-employed without Financial Document?

In most of the cases, small business owners do not have any documented proof to fulfill the bank’s criteria of documentation. They need a loan without any financial document. It would be very difficult to approve a personal loan for the banks without the assurance of repayment.

If you can keep your home or land as a mortgage of the loan, it would be easier to secure. The credit score is also playing a vital role here. You have to pay more interest if there is less credit score. You can check your credit score before applying for a personal loan for free.

The same difficulty is applicable for lower income group people. The person who has the monthly income of less than Rs 15000, the banks do not want to approve a personal loan to them. You have to do nothing but wait for your income to increase up to the threshold limit for applying for a personal loan.

If you have an endowment LIC policy you can take loan against the policy and the process is now started online also.

Important points about personal Loan:

  • You assess your requirement rather than eligibility. If you need the money of Rs 2 lakhs to concentrate on that even your eligibility is Rs 5 lakhs say. People borrow more than what they need for buffering. Don’t join in that queue.
  • Always negotiate the interest rate with the banks. Banks are very much tending to offer you the standard rate which is on the higher side. Keep your eye open on the market and verify with other banks also. Ask the bank to disclose your credit score (Better you have it before applying) and reduce the interest rate if you have a good score.
  • Know all the costs such as Processing fee, Prepayment charges, if any. You take the personal loan to tackle an emergency situation or for short-term needs. If you are able to repay early, there should be any hindrance or cost to repay the loan.


It would be a wise decision if you can avoid taking personal loans. Most of the times the personal loan is required due to deficiency of cash. The interest rate of a Personal loan is very high. It may be from 12% to 30%. If you need the loan to fulfill a wish such as a high-value car or exotic vacation you should restrict yourself from having that.

If you really need the money check with your friends and relatives. You take the personal loan in the extreme case when you are unable to arrange the money by any means.

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