Personal loan for self employed is one of the most sought after financial products. It helps borrowers to manage any monetary requirements that they have. They can make the most of the benefits like zero end-use restrictions to fund expenses like wedding, vacation, home renovation, business expenses etc. However, one must find answers to certain questions before availing the credit.
6 questions to ask before availing a personal loan for self employed
Here is a list of six important questions that one must ask before availing a personal loan for self-employed –
1- Why do I need a personal loan?
The first thing that an individual must ask himself/herself is the reason for their borrowing. Typically, personal loans help individuals to meet any financial requirements, be it planned or unplanned. Borrowers must check the purpose of the credit before applying for the same, and plan their repayment accordingly.
2- How much funding do I need?
After narrowing down on its purpose, individuals must decide the amount they require to fulfil that monetary gap. List down all the requirements and find out the exact amount necessary to manage the current situation. Since this is an unsecured loan, an applicant’s credit score plays a pivotal role here in determining the loan amount, and one must apply accordingly.
It is ideal to opt for an amount that applicants easily repay without any hiccups. Otherwise, it will affect their credit history as well as their CIBIL score.
3- What are the eligibility criteria?
The chances of approval of a personal loan for self-employed depend on whether a borrower can successfully meet the eligibility criteria or not. Therefore, it is essential to learn more about the eligibility requirements of a lender, and then figure out whether the applicant can meet it or not.
4- What is the interest rate?
Before availing any credit, it is imperative to know the rate of interest associated with it. Since it varies from one lender to another, applicants can make a comparison between various financial institutions to find the best possible offer.
A point to note here is that the interest contributes significantly to the EMIs. Also, the creditworthiness of a borrower acts as a factor here; borrowers with a higher credit score can negotiate a better rate of interest.
5- What is the loan tenure?
Similar to the rate of interest, tenure of a personal loan also changes with each lender. Since the tenure of credit has an effect on its EMIs, one should opt for a financial institution that is offering a flexible repayment tenure. It makes repayment easy and can also help a business that is in debts to recover.
Borrowers can take the assistance of EMI calculators for this purpose to make an informed decision.
6- What are the additional charges?
A loan application includes several additional charges, which, if not measure correctly, can increase the cost of borrowings. Such charges include –
● Processing fees.
● Late fees.
● Part pre-payment charges.
● Foreclosure fees.
● Legal fees.
Borrowers must take into consideration such charges while planning for a personal loan.
Business owners who are planning to avail a credit for their organisation can instead opt for a business loan as well. Even though the personal loan can assist them in managing a financial crisis, business loans are tailor-made to support organisations during any financial strain. NBFCs like Bajaj Finserv are offering Business Loan at attractive interest rates, with flexible tenure. Additionally, applicants can avail up to Rs.20 lakh without any collateral.
Furthermore, the introduction of pre-approved offers has made the loan application process smooth and hassle-free. It is available on financial products like business loans, personal loans, etc. An applicant can check their pre-approved offers by providing their name and contact details.
Personal loan for self-employed is a great option to manage any financial strain. However, one must ask the necessary questions to gather crucial information regarding any credit before making an application. It will help them to manage their repayments well and successfully avoid a financial crisis.