How to Apply for a Personal Loan if I am a Self-Employed Individual?
Are you a self-employed individual and confused if you can opt a personal loan or not?
Of course, you can.
A personal loan is amongst the most convenient option for considering if you are in immediate need of funds. This type of credit is quite flexible, as the lender does not offer you the loan for any specific purpose. You can use these funds as you wish to. The personal loan in UAE is made to self-employed, salaried employees, as well as professionals.
So, if you are self-employed, you can obtain a personal loan easily.
Who is a Self-Employed Individual?
The sole proprietors of the business are the self-employed people. These sole proprietors do not earn a fixed salary per month but are owners of their own unincorporated businesses.
As these individuals don’t earn a fixed income every month, it is a common misconception that it is difficult to obtain personal loans for self-employed people. But at the end of the day, it is a misconception, and misconceptions are not true.
What is the Eligibility Requirements for Obtaining a Personal Loan for Self-Employed Individuals?
Let us now discuss the eligibility criteria to obtain a personal loan for self-employed individuals.
The banks or other financial institutions give approval for personal loans to the self-employed individuals only when they have maintained an attractive credit score and report. Since these people don’t have a regular and fixed income source, the credit history and rating is the factor to judge their credit repayment behavior.
For being eligible to apply for personal finance in the UAE, you must be earning a certain amount of income every month. This income requirement is slightly higher in the case of self-employed individuals as compared to salaried employees. This is because self-established businesses are a riskier investment for the lenders
Moreover, if you are self-employed, then you have to pay for the salaries of your employees and bear various other expenses. Hence, you need to earn higher incomes every month to be eligible.
The age eligibility is a criterion that remains common for both self-employed and salaried applicants alike. Being a self-employed applicant for a personal loan, you must have a minimum age of 21 years. The maximum age requirement is 60 years for expats and 65 years for Emiratis.
Stability of Business
The stability of your business is another essential requirement that lenders consider before giving approval for your personal loan application. You must be involved in your present business for a minimum of 2 years & counting to be able to apply for personal finance.
Every bank has a different criterion for this too. This requirement is necessary as a self-established business has to overcome several risks. So, if such a business has been functioning for some years, then it is considered to have cleared the test of time.
Sales Turnover (Annual)
The yearly sales turnover of the business means the total revenue that the business has generated over a period of one year. Some of the lenders also have a minimum yearly sales turnover as an eligibility requirement.
Association with the Concerned Bank
If you are applying for a loan through some bank in the UAE as a self-employed individual, you will then have to be an account holder in this bank for a minimum of one year. Only then, you will be eligible to apply for a personal loan in UAE.
What are the Documents Required to Apply for Personal Loan for Self-Employed Individuals?
Meeting the eligibility is not enough to obtain a personal loan. You also need to present the following documents to your lender.
- Latest Bank Statements
- Emirates Identity Proof
- Business Ownership proof (either MOA (Memorandum of Association) with the signatures of all parties or Power of Attorney)
- UAE Visa and Passport (required only to obtain a personal loan for self-employed expats)
- Address Proof (through utility bills)
What All Can I Use My Personal Loan for?
There are various purposes for which you can use your personal loan. Mentioned-below are some of these purposes.
- To plan that long-awaited dream vacation
- To make payment for the wedding expenses (either your own or your family members)
- To clear off a pending debt
- To arrange for expenses involved in the renovation of your house
- To clear off the medical expenses that are not covered under your insurance
- To buy the latest and expensive gadget
- To pay for your child’s education
To Sum Up!
Personal Loans can be an excellent way of taking care of your urgent liquidity requirements. This type of credit is simple to obtain and involves less documentation.
Regardless of the high rates of interest, due to flexibility in their nature, personal loans have become a common choice amongst the people in the UAE who are in need of quick cash.
Obtaining a personal loan for self-employed individuals is quite simple. This article explains the eligibility criteria required for obtaining the same.