SELF-EMPLOYED PROFESSIONAL LOAN
The essence of a self-employed professional loan lies in its accessibility and flexibility, making it a suitable financial tool for professionals looking to invest in their businesses or practices. From procuring new equipment to expanding the business infrastructure, covering working capital needs, or other operational costs, these loans offer the much-needed financial support to self-employed professionals without exhausting their personal savings or assets.
In a country like India, where self-employment is a significant contributor to the economy, self-employed professional loans have gained momentum and popularity. This is due to their easy accessibility, fast approval process, absence of collateral requirements, and the understanding of the unique financial needs of self-employed professionals. The flexibility of these loans, coupled with their attractive terms, allows professionals to keep up with the pace of their business needs and achieve their professional aspirations.
Self-Employed Professional Loan can be divided into 2 different loan types
Term Loan for Self-Employed Professionals
A Term Loan is the traditional financing approach, best suited for self-employed professionals seeking a one-time, substantial fund infusion for specific endeavors such as workspace expansion, technology upgrades, or capital-intensive projects.
Interest Rate: The interest rate for these Term Loans typically ranges from 10.99% to 15%
Duration: These loans offer a flexible repayment period ranging between 12 and 60 months.
Dropline Overdraft for Self-Employed Professionals
The Dropline Overdraft is designed for professionals seeking financial flexibility. Rather than receiving a lump sum, professionals are allocated a maximum credit limit. Funds can be withdrawn as needed, ensuring liquidity for fluctuating requirements.
Interest Rate: Interest rates for the Dropline Overdraft usually lie between 10.99% and 15%. Notably, interest is charged only on the utilized amount.
Duration: The tenure of this loan type ranges between 12 and 60 months.
Term Loan for Self-Employed Professionals
A Term Loan is the traditional financing approach, best suited for self-employed professionals seeking a one-time, substantial fund infusion for specific endeavors such as workspace expansion, technology upgrades, or capital-intensive projects.
Interest Rate: The interest rate for these Term Loans typically ranges from 10.99% to 15%
Duration: These loans offer a flexible repayment period ranging between 12 and 60 months.
Dropline Overdraft for Self-Employed Professionals
The Dropline Overdraft is designed for professionals seeking financial flexibility. Rather than receiving a lump sum, professionals are allocated a maximum credit limit. Funds can be withdrawn as needed, ensuring liquidity for fluctuating requirements.
Interest Rate: Interest rates for the Dropline Overdraft usually lie between 10.99% and 15%. Notably, interest is charged only on the utilized amount.
Duration: The tenure of this loan type ranges between 12 and 60 months.
Loan Amount & Interesr Rates :
The amount for self-employed professional loans typically depends on the borrower’s income, creditworthiness, and the lender’s policies. In India, such loans usually range from Rs. 1 lakh to Rs. 50 lakhs, though it can vary based on the lender.
Interest rates can be fixed or floating and are influenced by factors such as the borrower’s credit score, income stability, loan tenure, and the lender’s policies. The interest rates generally range from 11% to 24% per annum.
Loan Repayment And Tenure :
Self-employed professional loans in India typically have a repayment tenure ranging from 1 to 5 years. The borrower needs to repay the loan amount plus interest in Equated Monthly Installments (EMIs). The EMI depends on the loan amount, interest rate, and tenure. A shorter loan tenure results in higher EMIs but can reduce the overall interest cost.
Eligibility Criteria
To secure a Self-Employed Professional Loan, the following documentation is usually required:
- Professional Degree Certification
- KYC documents
- Bank statement of the past 12 months
- ITR along with comprehensive financials Additional documents as required by the lender
