Freelancers are Self Employed individuals who work as an individual or a Business. Loan for Freelancers is challenging their income is not consistent neither their income source.
Type’s of Loan for Freelancers
Personal Loan for Self Employed
Self-employed are individuals who are not salaried and earn their income by running their own incorporated business. Self Employed can be divided into 2 categories
Self-employed professionals: Banks categories doctors, dentists, surgeons practicing from own clinics chartered accountant, architects, consultants, interior designers as Self Employed Professionals (SEP).
Self-employed non-professionals: These are business which are not categorised under self-employed professionals and can be manufacturing, trading or services business enterprises.
Personal Loans For Self Employed With Bad Credit Score
A self-employed may find it difficult to get a personal loan for professionals with a low credit score. Banks are not keen to offer an unsecured loan your loan if you have low CIBIL score as lenders perceive the risk of default as high in such cases. Hence, in cases of low credit score, borrowers have a higher chance of getting a secured loans such as mortgage loan or a gold loan.
Mortgage loans can be an attractive loan option for self-employed borrowers if they are looking for bad credit loans or low interest loans. Banks do a CIBIL score check for mortgage loans, but unlike a personal loan may sanction your loan with a lower credit score.
Gold Loans are the best loans for self-employed professionals with bad credit score as they are instant loans which can be availed with no financial documents and without a CIBIL check.
In addition to availing a mortgage loan or gold loans, you can also consider approaching NBFCs that are willing to extend credit to customers for slightly low credit scores subject to availability of collaterals, guarantees, past settlements. However, such loans are available at higher interest rates compared to other available loans in the market.
Personal Loan For Self Employed without Financial Documents
Similar to bad credit personal loan, it is difficult to get a personal loan for self employed with no proof of income such as three years ITRs or audited financial statements. You may be struggling to get a loan if you do not have complete financial documents or do not have a credit history. Bank finds it difficult to estimate your repayment capability and hence, may not sanction a loan to you.
In these cases also, availing a gold loan which does not require a CIBIL score or any financial documents may be one of the best available personal loan for self employed and professionals.