Self-employment is akin to a coin with two sides. On one side, you relish the freedom of being your own boss and making decisions that influence your career. On the other side, managing finances can often be a daunting challenge. Whether you are a business owner or a freelancer, there may be times when you require immediate access to cash. This is where you can rely on an easy loan app. These loan applications provide personal loans, which are recognised for their quick financial assistance and that too without requiring any collateral.
There are various factors involved in personal loan applications. One such imperative factor is the eligibility requirement. Keep reading to learn more.
Significance of Knowing Eligibility Criteria
When it comes to getting quick financial assistance, personal loans are an attractive option. However, it’s essential to know whether you meet the eligibility criteria. As the name suggests, eligibility criteria refer to the specific requirements that individuals or entities must meet to qualify for a particular programme, benefit, or opportunity. It’s like a “gatekeeper” that decides who gets in and who doesn’t! There are various types of eligibility criteria, including age, income, credit score, and more, which are further discussed in detail.
Now, let’s talk about why you must know the eligibility criteria for loan applications.
- Increased Chances of Approval: Knowing your eligibility helps you tailor your loan application to meet specific requirements.
- Better Planning: Sometimes lenders grant you a loan based on your eligibility. Knowing your eligibility makes financial planning much easier.
- Helps Avoid Rejection: If you don’t meet the criteria, your personal loan application might get rejected. Being aware allows you to prepare better or look for alternatives.
- Understanding Interest Rates: Your eligibility can influence the interest rate offered to you. Knowing this in advance can help you make an informed decision.
How to Know if You’re Eligible to Apply for a Loan?
As a self-employed Indian, you must grasp the eligibility criteria for personal loan applications. Let’s take a look at them:
Age Limit
Ideally, the basic age requirement for self-employed persons is between 21 and 60 years of age. If you fall under this category, then congratulations, you can apply for a loan.
Income
Since you are self-employed, it becomes essential for you to show a consistent source of income. This works as a guarantee and ensures the lender that you will repay the loan amount timely.
Bank Account
You must have a valid bank account for loan disbursement. This will also help the lender assess whether you have adequate money for repayment.
Credit Score
To secure better deals, a strong credit score is essential. A higher score can unlock competitive interest rates, reflecting your creditworthiness and repayment history.
Business Vintage
Some lenders prefer businesses that have been operational for at least one year, this will give you an edge over others.
What are the Documents Required When Applying for Personal Loans?
If you have ticked off all the requirements for the eligibility criteria, here’s how you can move forward:
- Identification Proof: You must submit your government ID, such as an Aadhaar card, passport, or voter ID for identity and address proof.
- Photograph: A recent passport-sized photograph will also be required.
- Income Proof: You must keep your last 6 months of bank statements or business cash flow details, along with ITR details, handy.
- GST Registration (if applicable): For self-employed individuals in businesses where GST registration is mandatory.
How Can You Apply for a Loan?
Now that you have a basic understanding of personal loans, their eligibility criteria, and documentation requirements, let’s take a look at how you can apply for an app loan.
- Before applying for a loan, it’s important to ensure you meet the criteria, which may include factors like your age, income, credit score, and more.
- Once you’re sure you meet the eligibility requirements, you’ll need to fill out the loan application form accurately and honestly.
- Then, you’ll be required to submit a set of documents that verify your identity, income, and other details along with the application. Make sure you submit original documents; this will help you avoid rejection.
- After submission, the lender will process your application. This could take anywhere from a few hours to a few days, depending on the lender.
- If your loan is approved, the lender will proceed to disburse the loan amount directly to your bank account.
Wrapping Up
Securing a personal loan as a self-employed individual in India can be a bit more challenging compared to salaried employees, but it’s certainly achievable with the right preparation. By having a clear understanding of the eligibility criteria, you can make the right decision.
If you’re looking for an easy way to apply for a personal loan, consider using the True Balance loan app. It is one of India’s most trusted lenders. With competitive interest rates as low as 2.4% per month, you can borrow up to ₹2 lakh. Additionally, the True Balance loan app offers longer repayment terms and foreclosure options, giving you the flexibility to fulfil your financial obligations.