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Personal Loan for Self Employed With or Without ITR

Published on Nov 07, 2018

Personal Loan for Self Employed With or Without ITR

With ITR

If you are going through a financial crisis and you require immediate funds for a short period of not more than 5 years and you have no collateral to offer, you can avail a personal loan. Different lenders have different eligibility criteria. Points ahead will help you in understanding the eligibility criteria: You can apply for a personal loan if your age is between 21 years to 65 years.

In case of a self-employed professional, the following documents are required:

• Identity Proof (PAN card, Aadhaar Card, Passport, Voter iD etc.).

• Residence Proof ( Bank statement, utility bill, Registry copy, lease or rent agreement, TAN allotment letter).

• Age Proof (PAN card, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate etc.).

• Income Proof (Last 2 years Income Tax Returns, latest 6 months bank account statement).

Without ITR

ITR is not required for salaried employee if the loan amount is less than 5 lakhs,but if the requirement is more than 5 lakhs ITR, Form 16 will be mandatory.

In case of self employed approval of personal loan is possible with certain conditions like:-

• Vintage of the business should be more than 1 year to validate Business Registration is mandatory.

• Current Account/Over Draft/Cash Credit statements are required.

• Eligibility depends on your CIBIL and Bank statements.

• Own residence will add advantage to your profile.

Personal loan is an unsecured loan, for availing it no collateral is required. It is a bit difficult to get a personal loan without Income Tax Returns (ITR), as personal loan being an unsecured loan, lenders depend upon your income-related documents to assess your true repayment capacity. You can try availing a personal loan from NBFCs as their eligibility criteria is not as hard as in case of banks. The only point to keep in mind is that interest rate will be a little high for you. You can get a personal loan from a bank as well if you don't have ITR. Bank will consider giving you a personal loan without ITR only if you are an already existing customer of the bank, you have paid all your previous dues on time and your credit score is fairly high.

Factors Deciding Interest Rates of Personal Loans

The interest rates for personal loans via banks and NBFC’s start all over 12.5% per year and go most of the way upward to around 28%. This rate of interest for such personal loans is generally calculated on a reducing balance implying the interest is calculated only on the balance Principal amount payable. This rate of interest is a function of multiple parameters such as the company you doing work for, the town you stay, your salary, your current commitments and so on. It will be quite difficult to provide you with a detailed of the finest personal bank loan interest rate centered on just a few parameters whilst the logic employed by banks is pretty comprehensive. However, you may get an at Personal Loan rates of interest on a platform like which has included the personal loan interest rate for many of the leading banks which focus on unsecured loans. Why don't we have a look at a few of the profile parameters that could affect a personal loan interest rate

1. Working profession or self-employed –

The rates of interest could very predicate on you being a salaried professional or one-man shop person. Under one-man shop again, the interest rates could possibly be a function of whether you are a self – employed professional such as a physician or a self-employed business person. Among the hypotheses behind it is that a salaried person is assumed to possess a relatively steady job which makes the documentation for the loan simple and easy. In the case of a personal loan for a self-employed business, the loan company would closely check up on the past financial health of the company. Since the personal loan is an unsecured loan, the lender would ideally desire to check out the repayment ability for the customer.

2. Current company:

Each bank has segregated the most effective companies into different categories. For ease let us call this as Category A, Category B, Category C and Category D. apart from these categories Banks could also have an open market category that will be a summary of companies which are not listed in the aforementioned categories. And so the company you are working would determine your personal loan rate of interest. For instance a Category an organization employee may get a personal loan at an interest rate of 13% whereas a Category D company employee might get your own loan with similar parameters at 17%. In fact, there are several banks that do not even offer an individual loan if the company is not listed

3. Monthly take home salary-

you will find few banks and NBFC’s which offer an improved interest rate on a personal loan to customers who have a higher monthly take home salary. Though all the criteria, for instance, the company, the location you stay in, the mortgage required and so forth is identical, a Bank might just offer you a better ROI in case you have an increased salary.

4. City you stay –

The minimum salary takes off to calculate eligibility could be influenced by the city you stay in. As an example, a Tier 2 city might have a salary cut-off of Rs 20.000/- vis-à-vis a metro city may have an increased cut-off. This really is taking into account the expense of staying in each city. Along with the eligibility, the private loan rate of interest could also vary in some instances.

5. The loan required –

Some banks offer lower personal bank loan rates of interest in line with the quantum associated with loan required. This interest rate is normally lower for higher loan amounts. By way of example, a health care provider trying to get a 5 lakh unsecured loan might pay a 15% rate of interest compared to a 14% if he takes a 20 lakh loan. This might be to simply help banks up sell loans to credit worthy customers

6. CIBIL Credit score –

There is different cut off for banks below an individual wouldn't normally qualify for a loan. However, a great credit rating would help to get an improved rate of interest on personal loan.

Hope it will help. Along with the above points also do look for processing fee, pre closure charges and so on to decide on the best offer.

Personal Loan Rates By Various Banks

HDFC : I took a loan from HDFC @14%, 800 INR for processing fees and amazing ease.

Here is my experience with other banks
SBI : Highest of rates, extremely poor service, they don't care about customer. Don't even think of taking loan from SBI, only suitable for Adani and Mallya

ICICI: More rates, more processing fees, more strict.

AXIS: 16% rates, 2% processing fees.

CITY Bank: Similar rates as HDFC, but they take longer and eventually might reject the application.

Go with HDFC

The financial institution that will be perfect for you will depend on the rate of interest and processing fee they are charging. It differs from one bank to another and also from one individual to another.

Generally the rate of interest on a personal loan varies from 11% to 19%. In some special cases, it can get cheaper than the average rate. A brief overview of interest rates on personal loans offered by different financial institutions is as follows:

SBI- 18.50%, Andhra Bank- 15.75%-16.75%, ICICI Bank- 15.50%-17%, Bajaj Finserv provide rate of interest on personal loan -12.49%

In some banks/NBFCs you may find lower interest rates than these, but they may have a high processing fee and many other hidden charges. So, be careful; always choose the best personal loan for you, and not the cheapest.


Unlike a mortgage, a personal loan is not secured over property. Personal loans rely on the financial reputation of the borrower. It requires minimal documentation such as income proof, ID and address proof. If you are an existing customer, the process will be much easier with minimal or no documentation. As an existing customer you just need to enter few details pertaining to your net banking or customer id and once your eligibility is approved, you can get online approval for your personal loan.