More than 50% of India’s workforce is self-employed. While the entrepreneurial bug is spreading its wings far and wide in the country, it does come with its own set of challenges. For instance, when it comes to securing a loan, whether it’s a home loan or personal loan, salaried individuals may still get higher preference over the self-employed clan. However, this trend is changing quickly.
If you’re a self-employed individual looking to expedite your chances of getting a loan approved, here are a few steps to keep in mind:
Maintain accurate financial records
Regardless of the scale of your business, you must ensure that all records of your business, including the expenses, revenues, taxes, bank statements, and payment slips are in order. Most lenders diligently scour financial records before approving a housing loan.
Improve your credit score
Obtaining a loan when you’re sailing your own ship is difficult, but your creditworthiness can significantly improve your home loan eligibility chances. Even a small car loan that you’ve taken in the past with regular outflow of EMIs can highly work in your favor.
Clear pending debts
A lot of people prefer upgrading their lifestyle when they start to see impressive profits rolling in. Getting a bigger and better house may top the upgrade checklist, for which they may seek home loans. However, if at this juncture, you have pending debts, it’s best to clear them first. Not only does this reduce the financial burden of paying off multiple loans, but it also gives the lenders some peace of mind.
Chalk out your business plan
Without the safety blanket of a salary, an effective and well-thought-out business plan with promising financial projections works as a security cushion. If you’re seeking a home loan, then your lender may not just take your business plan as a positive home loan eligibility element, but would also initiate faster approvals.
Seek a guarantor
Your eligibility and chances of procuring the loan differ from one provider to the other. However, what most lenders may find comfort in is getting a guarantor on board. In the absence of credit history or if your business is still in infancy, a guarantor can make a strong case in your favor.
Choose the right lender
One of the primary criteria for speeding up your home loan process is by opting for the right lending entity. Some providers may have stringent parameters and higher home loan interest rates when it comes to offering home loans to self-employed individuals. Tata Capital has quick and hassle-free loan options available for self-employed borrowers with minimum guidelines. Therefore, obtaining a home loan from Tata Capital becomes fast and convenient.
Whether you’re on the lookout for a home loan, business loan, or personal loan, as a self-employed individual, you may have to go through a different process altogether. However, the steps mentioned above help you to obtain a loan quickly and easily.