Denice R. Preston
You may experience a financial crisis as a self-employed person at any point during the month. It can be difficult to manage your finances when you are your boss. For self-employed people looking for financing, many financial institutions offer personal loans.
Loan Tap offers the best personal loans for urgent financial needs. This blog will discuss why personal loans are a good option to get funds quickly. We have provided seven benefits to personal loans and explained how to apply online for them.
- Online Application
- Unsecured Loan
- Higher Loan Amount
- Minimal documentation
- Flexible Repayment Tenure
- Get a Quick Loan
- Flexibility in Use
Online Application Process
Applying for a personal loan online is the first and most important benefit. Online application forms are available for borrowers who can complete them anywhere they like. Personal loans for the self-employed are very popular with freelancers and startup owners. You can get a loan at any time and anywhere you are. You can simply enter your details and verify the documents to receive funds in a matter of hours. It’s quick and easy to use in emergencies and can be a lifesaver.
Unsecured loan
A personal loan has two benefits. This is an unsecured loan, which does not require collateral. There is no requirement to provide security like a mortgage, so you are not at risk. LoanTap will approve your loan application based on your eligibility and documents. Credit score, payment history, and documentation are all taken into consideration.
Higher Loan Amount
The income of self-employed and freelancers can be unpredictable. Salaried professionals have a steady income source, reducing the hassle of managing monthly expenses. Some months can be financially great, others may be decent, while some months might prove difficult for a self-employed person. An instant personal loan is a great option in such situations. It can provide a loan amount of Rs50,000 to Rs 10 Lakhs.
Minimal documentation
These days, you no longer need to bring a bunch of documents and photocopies to the lender. Online lending platforms can bridge the gap between lenders, borrowers, and intermediaries. Borrowers no longer have to stand in line to submit required documents to be approved for a loan.
The following are the basic documents that you will need to get a loan:
- Identification Proof: PAN Card/ Aadhaar card
- Address Proof: Aadhaar/Voter ID/Passport/Driver’s License
- Income Proof: The Salary Slip for the past three months.
- Bank Statement for the past six months
After you have uploaded these documents, the lender will review them and determine if you are eligible to receive personal loans.
Flexible Repayment Tenure
For self-employed people, paying off the loan can be a hassle. This takes up a lot of your income. The monthly cash flow can become unbalanced, and you may have to make compromises on your regular expenses. Personal Loans from LoanTap let you choose a repayment term. Consider your debt-to-income ratio before you make a decision. A personal loan for self-employed individuals can be repaid in 6 to 60-month terms. To make it easier, you can choose the best repayment plan.
Quick Loan Disbursal
Online loans are extremely convenient because you can immediately get credit to your bank account. Once your application is complete and all documentation has been verified, the loan will be disbursed quickly. The process will take less than 24 hours. If your credit score has decent, you can also get the loan amount the same day.
Flexibility in Use
Money end-use is unlimited. It can be used for whatever purpose you choose, as long as it’s legal. A personal loan can be used to meet an immediate financial need. Self-employed people who struggle with unplanned expenses and bills will find comfort in a personal loan.
Considerations before applying for an online personal loan
You now know the advantages of a personal loan. Also, you need immediate cash to pay all your bills. The loan amount and term will depend on many factors. They will also help lenders evaluate your credit history to get a personal loan quickly.
Increase your credit score
Credibility is a reflection of your financial and credit history. Borrowers need to repay all debts and maintain a clean credit record. It will not affect the loan approval process. It is important to take control of your credit score for fast loan approval. It should be between 580 and 630.
Check Financial Strength
For freelancers and self-employed, paying monthly installments can be difficult. When deciding on the EMI amount, be careful. It should not exceed 50% of your monthly net payments. You must ensure that your monthly budget is balanced.
Repayment History
Repayment history can hurt your credit score. You should also ensure that you don’t have any recurring loans. This shows you are desperate for money. If a borrower takes out loans often, lenders can be suspicious. Personal loans should only be obtained when necessary. Between disbursals, there should be a gap of six months.
Manage Credit Report
A credit report shows your financial capabilities. Your application could be rejected if it isn’t accurate. Keep track of all credit information. Before applying for a loan, verify that your credit reports are accurate.
What if you have a low credit score?
You don’t have to have low credit scores to get a loan. Lenders are typically influenced by Credit Information Bureau (India) Limited (CIBIL) scores. Higher credit scores will require additional proof to support their repayment ability.
