Personal loans are the most suitable option, when it comes to handling an urgent financial need. Whether you are salaried or a self-employed individual, a flexible borrowing option, such as personal loan, can solve your temporary liquidity problem. There are a number of key factors such as income level, repayment capacity, credit and employment history that determine your eligibility and interest rate for the loan. However, the exact cut-off limits for the above factors vary for self-employed and salaried individuals. Here’s a low down on how these factors vary while availing a personal loan.
- Age criteria: Each bank has its own predefined minimum and maximum age criteria for availing a personal loan. These age limits are usually lower for salaried individuals than self-employed ones.
|Bank Name||Type of Applicant||Age bracket|
|ICICI Bank||Salaried||23-58 years|
|ICICI Bank||Self- employed||28-65 (For Doctors, the minimum age limit is 25 years)|
|Axis Bank||Salaried||21-60 years|
|Axis Bank||Self-employed||24-65 years|
- Income Requirements: Owing to the uncertainty associated with a business or practice, the minimum quantum of earnings is usually higher for a self-employed individual in comparison to a salaried individual. For example, the eligibility criteria of Bank vary as follows:
|Bank Name||Applicant Type||Income criteria|
|ICICI Bank||Salaried|| Minimum monthly income of Rs. 17,500|
*Rs. 25,000 for residents of Mumbai and Delhi
*Rs. 20,000 for residents of Chennai, Pune, Bangalore , Hyderabad and Kolkata
|ICICI Bank||Self-employed||Minimum turnovershould be of Rs. 40 lakhs for non-professionals; while for professionals, the minimum limit is Rs. 15 lakhs|
|Indusind Bank||Salaried||Minimum net monthly income should be Rs. 25,000|
|Indusind Bank||Self-employed||Net annual income post tax should be Rs. 4.8 lakhs|
|Kotak MahindraBank||Salaried||Minimum net monthly income should be of Rs. 25,000|
|Kotak Mahindra Bank||Self-employed|| Minimum annual turnover should be:|
- Additional Criteria: The list of requirements for self-employed individuals is lot more stringent than that for salaried individuals. This is so because unlike salaried employees, self-employed do not have a fixed or regular source of income, and they might have major expenses. Few of the bank specific requirements for an individual availing a personal loan:
|Bank Name||Applicant Type||Additional criteria|
*This limit is of 3 years for Doctors
|Kotak Mahindra Bank||Salaried|
|Kotak Mahindra Bank||Self-employed|
- Documents Required: The key documents required to be submitted along with the personal loan application majorly remain the same across banks and types of applicants, however the few differences that exist include:
Apart from these, the documents that are common to both the categories include Address proofs, Identity Proofs and acknowledged Income Tax Return.
- Rate of Interest offered: As is known, interest rates vary according to the applicant’s profile. While for salaried individual, the reputation of the company they are working with matters, for self-employed, it’s their business’ domain that makes the difference. On similar income levels, the rates are usually higher for self employed in comparison to salaried individuals. However, self-employed individuals who share a good relationship with the bank can expect lower rates.