Financial Updates

Personal Loans and their Forte

Leave a comment

Personal loans are the single most powerful credit facility that is available through banks, coming second to none. Every other loan from banks has a set of restriction on how it is to be used, but personal loans do not fall under any such boundaries. One could use a personal loan for practically any purpose that is not explicitly speculative. Even when compared with credit cards that offer unbridled spending capacity, personal loans leave them far behind in the race with great interest rates. In addition to the same, these loans are offered on secured and unsecured basis and just have a minimum income limit and a mediocre to high credit score requirement.

Personal loan being available in unsecured forms actually are a boon for people who do not have either substantial gold or property to offer as security. On the flip side, these loans have a higher interest rate than secured loans. These loans are offered both to salaried as well as self-employed individuals and they have slight variations in the respective loan applications. Personal loans offered to self-employed individuals also tend to be of higher value than the loans offered to salaried people.

Basic Eligibility Criteria for availing Personal Loans

Here, begins the difference between applications submitted by self-employed individuals and salaried employees. The basic eligibility of course covers age and income levels and apart from those, there are a few additional requirements.


  1. Age Requirements – Varying from lender to lender, the maximum age limit could be anywhere from 50 years to 70 years. But in the case of salaried individuals, this age limit is generally lower, obviously due to restrictions on the maximum age for retirement
  2. Income Levels – Salaried individuals stand at an advantage here, because salary is not something that can drastically reduce any particular month, so there are no losses to be worried about for lenders. In the case of self-employed individuals, business often have that risk of uncertain loss during the course of the loan. That makes offering an unsecured loans a great risk for lenders. So, self-employed people would need to have a higher rate of turnover in order to qualify for a personal loan amount that a salaried individual can be approved for with a lower salary
  3. Concerning additional requirements, salaried individuals are again at an advantage, since most verification details are made through the companies that they have worked with and their work history serves as the proof of their behavior concerning expenses and savings. Self-employed individuals would need to file a lot more paperwork than salaried individuals but end up with a loan amount that is higher than a salaried individual if they dot their is and cross their its properly

Apart from the above criteria, the documents that might be required banks to process the application could be of the following for salaried individuals and self-employed individuals –


  1. Salaried Individuals –

    1. Latest ITR form that has been acknowledged
    2. Latest Form 16 from the employer along with the computation details
    3. Latest 3 months’ payslips
    4. Latest 6 months’ account statement from the bank account that serves as the salary account
    5. Photo identification proof (government approved)
    6. Latest and current address proof
  2. Self-employed Individuals –

    1. Proof of qualification or registration for doctors, engineers, MBA consultants, CA and architects
    2. Latest 6 months’ account statement from the bank account that serves as the income account
    3. Latest 2 years’ CA certified balance sheet
    4. Latest 2 years’ CA certified profit and loss statement
    5. Latest 2 years’ CA certified income computation
    6. Latest 2 years’ acknowledged IT returns copies
    7. Photo identification proof (government approved)
    8. Latest and current address proof

One should bear in mind that the rates offered to one in the same business as another might vary. That is due to the nature of business as a source of income, one’s credit history and stability in come or employment.

Check Top 3 Bank Personal Loans here:

SBI Personal Loan

HDFC Personal Loan

Axis Bank Personal Loan


Author: shruthi6059

Hi this is Shruthi from India. I am an independent financial adviser specializing in comprehensive financial advice.I can help with all your financial advice needs whether your situation is straight-forward or out of the ordinary.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s