Best Personal Loans for Self-Employed Individuals 2019

Personal loans are a great way to finance unexpected or large expenses. However, not all lenders offer personal loans to self-employed individuals. In order to help these individuals compare the best offerings, we've highlighted the best personal loans in India for self-employed individuals to make it easy to compare rates and features.

Table of Contents

Our Top Picks for the Best Personal Loans for Self-Employed Individuals in India

The following loans represent the best available to self-employed individuals based on our comprehensive review of the personal lending market. In order to assess the best deals, we considered interest rates, fees and various features that would make loans attractive to different borrowers. When comparing loans we recommend that you aim to minimise the total cost of borrowing while ensuring that you can comfortably afford the monthly repayment schedule.

Estimated Cost of 3-Year, Rs. 2 Lakh Personal Loan by Bank: Chart ranks banks by estimated total cost of borrowing, based on the highest interest rates advertised to self-employed loan applicants. Estimates include processing fees.

Best Large Personal Loan for Self-Employed Individuals: Citibank Personal Loan

Consider this if are self-employed and seek large personal loan

Required Monthly Income Unknown
Min. Loan Amount Rs. 25,000
Max. Loan Amount Rs. 30 lakh
Processing Fee 2% - 3%
Interest Rate Type Fixed
Loan Tenure 12 to 60 months

Citibank offers the largest personal loans to self-employed borrowers in India. The bank offers loans as small as Rs. 25,000 and as large as Rs. 30 lakh, which can be crucial for borrowers that require a large amount of financing. While the bank does not advertise the lowest rates for self-employed loan applicants (16.00% - 18.99%), it does not require self-employed borrowers to be existing customers of the bank unlike many of its competitors. Additionally, it charges fixed interest rates, which means that its rates do not change throughout the loan tenure.

Additionally, it is worth noting that Citi offers more competitive rates to self-employed professionals (16.00% - 17.99%), making it particularly attractive to these individuals. On the other hand, non-professionals are charged less attractive interest rates of 17.49% to 18.99%.

Read our full review

Duration (Years)Processing FeeEffective Interest RateMonthly PaymentTotal Cost
12%16%Rs. 88,494Rs. 1,08,770
22%16%Rs. 48,963Rs. 1,95,115
32%16%Rs. 35,157Rs. 2,85,653
42%16%Rs. 28,340Rs. 3,80,334
52%16%Rs. 24,318Rs. 4,79,083
*Assuming self-employed professional with annual gross income of Rs. 10 lakh, loan of Rs. 10 lakh, total cost includes processing fee
Duration (Years)Processing FeeEffective Interest RateMonthly PaymentTotal Cost
12%16%Rs. 88,494Rs. 1,08,770
22%16%Rs. 48,963Rs. 1,95,115
32%16%Rs. 35,157Rs. 2,85,653
42%16%Rs. 28,340Rs. 3,80,334
52%16%Rs. 24,318Rs. 4,79,083
*Assuming self-employed professional with annual gross income of Rs. 10 lakh, loan of Rs. 10 lakh, total cost includes processing fee

Best Long-Term Personal Loan for Self-Employed Individuals: TATA Capital Personal Loan

Consider this if are self-employed and seek a long-term personal loan

Required Monthly Income Rs. 30,000
Min. Loan Amount Rs 75,000
Max. Loan Amount Rs. 25 lakh
Processing Fee up to 2%
Interest Rate Type Fixed
Loan Tenure 12 to 72 months

TATA Capital stands out among lenders that offer loans to self-employed individuals due to its option to borrow for up to 6 years. This can be a very useful for borrowers that prefer to decrease their monthly payment by spreading out the cost of their loan over a longer period of time. The bank also advertises some of the lowest interest rates for self-employed personal loan applicants of 11.49% to 19%.

However, TATA Capital's personal loans are not a good fit for all prospective borrowers. For example, it's minimum income requirement of Rs. 2,00,000 per year is higher than many of its competitors. Additionally, while the bank offers the longest personal loan tenures to self-employed borrowers, it does not offer the largest loan amounts (up to Rs. 25 lakh).

Duration (Years)Processing FeeEffective Interest RateMonthly PaymentTotal Cost
12%11.49%Rs. 88,610Rs. 83,325
22%11.49%Rs. 46,836Rs. 1,44,056
32%11.49%Rs. 32,971Rs. 2,06,965
42%11.49%Rs. 26,084Rs. 2,72,038
52%11.49%Rs. 21,988Rs. 3,39,255
62%11.49%Rs. 19,286Rs. 4,08,592
*Assuming loan of Rs. 10 lakh, total cost includes processing fee
Duration (Years)Processing FeeEffective Interest RateMonthly PaymentTotal Cost
12%11.49%Rs. 88,610Rs. 83,325
22%11.49%Rs. 46,836Rs. 1,44,056
32%11.49%Rs. 32,971Rs. 2,06,965
42%11.49%Rs. 26,084Rs. 2,72,038
52%11.49%Rs. 21,988Rs. 3,39,255
62%11.49%Rs. 19,286Rs. 4,08,592
*Assuming loan of Rs. 10 lakh, total cost includes processing fee

Banks Worth Considering if You're an Existing Customer

While the loans above are our picks for the best available personal loans available to most individuals in Singapore, some banks offer even more competitive products to their existing customers. For this reason, if you already bank with one of the lenders below, you should also consider their personal loan offerings during your search.

UCO Bank Shopper Loan

Consider this if need a small loan and are a current UCO Bank customer

Required Monthly Income Rs. 10,000
Min. Loan Amount Unknown
Max. Loan Amount Up to Rs. 2 lakh
Processing Fee 1% (minimum Rs. 1,000)
Interest Rate Type Floating
Loan Tenure Up to 60 months

Prospective loan applicants that have been UCO Bank customers for at least 6 months should consider the bank's Shopper Personal Loan. This loan has the lowest interest rate available to self-employed borrowers at 9.8% to 10.8%, and charges a lower processing fee than most lenders in India at 1%.

There are a few drawbacks to UCO Bank's Shopper Loan. First, it is not a good option for loan applicants that need funds immediately and are not current UCO Bank customers. This is because in order to be eligible for UCO's personal loans, loan applicants must have banking histories of at least 6 months with UCO. The Shopper Loan may also be limiting to individuals that require a large sum of cash because it only offers loan amounts of up to Rs. 2 lakh.

Duration (Years)Processing FeeEffective Interest RateMonthly PaymentTotal Cost
11%9.8%Rs. 17,565Rs. 12,775
21%9.8%Rs. 9,211Rs. 23,053
31%9.8%Rs. 6,435Rs. 33,648
41%9.8%Rs. 5,053Rs. 44,560
51%9.8%Rs. 4,230Rs. 55,785
*Assuming loan of Rs. 2 lakh, total cost includes processing fee
Duration (Years)Processing FeeEffective Interest RateMonthly PaymentTotal Cost
11%9.8%Rs. 17,565Rs. 12,775
21%9.8%Rs. 9,211Rs. 23,053
31%9.8%Rs. 6,435Rs. 33,648
41%9.8%Rs. 5,053Rs. 44,560
51%9.8%Rs. 4,230Rs. 55,785
*Assuming loan of Rs. 2 lakh, total cost includes processing fee

Union Personal Loan

Consider this if you are a current Union Bank customer and seek a personal loan with a low income requirement

Required Monthly Income N/A
Min. Loan Amount Unknown
Max. Loan Amount Up to Rs. 10 lakh
Processing Fee 0.50%, minimum Rs. 500 + GST
Interest Rate Type Floating
Loan Tenure Up to 60 months

Current customers of Union Bank should consider the bank's Union Personal Loan. While it charges a relatively high interest rate of 14.5%, the bank's personal loan for non-salaried borrowers is a good option for these individuals as it does not have a minimum income requirement, unlike its competitors.

However, Union Bank requires that loan applicants have been customers with the bank for at least 2 years and have an average quarterly balance of at least Rs. 25,000. Additionally, the Union does not offer the largest personal loans to self-employed borrowers, with a maximum loan amount of Rs. 10 lakh. For this reason, some individuals may prefer another to apply for financing from a different lender.

Duration (Years)Processing FeeEffective Interest RateMonthly PaymentTotal Cost
10.5%14.5%Rs. 17,565Rs. 12,775
20.5%14.5%Rs. 9,211Rs. 23,053
30.5%14.5%Rs. 6,435Rs. 33,648
40.5%14.5%Rs. 5,053Rs. 44,560
50.5%14.5%Rs. 4,230Rs. 55,785
*Assuming loan of Rs. 2 lakh, total cost includes processing fee
Duration (Years)Processing FeeEffective Interest RateMonthly PaymentTotal Cost
10.5%14.5%Rs. 17,565Rs. 12,775
20.5%14.5%Rs. 9,211Rs. 23,053
30.5%14.5%Rs. 6,435Rs. 33,648
40.5%14.5%Rs. 5,053Rs. 44,560
50.5%14.5%Rs. 4,230Rs. 55,785
*Assuming loan of Rs. 2 lakh, total cost includes processing fee

IDBI Bank Personal Loan for Self-Employed Professionals & Non-Professionals

Consider this if you are self-employed and a current IDBI Bank customer

Required Monthly Income Rs. 3,60,000 annual business income
Min. Loan Amount Rs. 50,000
Max. Loan Amount Rs. 10 lakh
Processing Fee 1% + tax
Interest Rate Type Floating
Loan Tenure 12 to 60 months

IDBI Bank's personal loans are only available to self-employed borrowers if these individuals are already banking or borrowing customers with the bank. That said, prospective borrowers that are eligible may want to consider IDBI's personal financing, due to the bank's competitive rates for self-employed borrowers (13% - 14%). This is especially true for individuals with high credit scores. For example, self-employed professionals and non-professionals with credit scores of at least 800 are charged an annual interest rate of 13%.

With this said, there a few considerations for these individuals must consider before choosing to apply for IDBI's personal loans. First, the bank requires that borrowers earn meet relatively high annual income requirements. For example, self-employed professionals must earn at least Rs. 3.6 lakh and self-employed non-professionals must earn Rs. 5 lakh. Additionally, the bank does not offer loans of more than Rs. 10 lakh to self-employed borrowers, which can be limiting for those that require a large amount of financing.

Duration (Years)Processing FeeEffective Interest RateMonthly PaymentTotal Cost
11%13%Rs. 89,317Rs. 81,807
21%13%Rs. 47,542Rs. 151,004
31%13%Rs. 33,694Rs. 222,982
41%13%Rs. 26,828Rs. 297,720
51%13%Rs. 22,753Rs. 375,184
*Assuming borrower with CIBIL Score above 800, loan of Rs. 10 lakh, total cost includes processing fee
Duration (Years)Processing FeeEffective Interest RateMonthly PaymentTotal Cost
11%13%Rs. 89,317Rs. 81,807
21%13%Rs. 47,542Rs. 151,004
31%13%Rs. 33,694Rs. 222,982
41%13%Rs. 26,828Rs. 297,720
51%13%Rs. 22,753Rs. 375,184
*Assuming borrower with CIBIL Score above 800, loan of Rs. 10 lakh, total cost includes processing fee

How to Choose a Personal Loan

Personal loans are particularly popular for individuals that require financing for a purpose that is not covered by specific-use loans, such as home or car loans. Many loans provide borrowers with cash within a few business days, making these loans attractive to individuals that require funds for nearly immediate expenses.

Before you decide to apply for a personal loan, it is crucial to compare the all of the available financing options. For instance, while personal loans are a cheaper type of debt than credit cards in terms of annual interest rates, they are generally more expensive compared to specific-use loans.

If you still believe that a personal loan is the best fit for your borrowing needs, it is crucial to compare loans for which you are eligible by loan amount, loan tenure, various requirements and interest rates. For example, some lenders only offer very small or very large loan amounts, so you will need to choose a bank that provides loan sizes that fit your borrowing needs. You also need to be aware eligibility requirements for personal loans that you are considering. This is because some banks have particular monthly income requirements or require that you are a current bank customer in order to be eligible for loans. Finally, you'll want to compare the cost of borrowing from each lender. Ideally, you should choose a loan that has a low total cost of borrowing (interest cost + fees) as well as a monthly payment requirement that you are sure that you will be able to afford to pay each month of your loan duration.

Am I Eligible for a Personal Loan?

Before you apply for a loan you should confirm that you are eligible The first things that most banks will consider are your credit history, income level and employment circumstances. There are a variety of loans available for individuals based on their credit score or income situations. For example, some banks offer loans that are specifically designed for high or low-income earners or based on their status as professional or non-professional non-salaried employees.

How to Apply for a Personal Loan

If you decide to apply for a personal loan, you will need to fill out an application form and submit a handful of required documents as mentioned above. Some banks are willing to negotiate from their advertised interest rates, which highlights the importance of comparing several lenders and rates before choosing to apply for your personal loan.

Examples Documents Typically Required for Personal Loan Application

Required DocumentNon-Salaried/Self-Employed Applicant
Proof of IdentityPassport, Drivers License, PAN
Proof of AddressPassport, Utility Bill
Proof of IncomeAudited Financials, Bank Statement

Methodology

In order to identify the best personal loans for self-employed individuals, we initially conducted a comprehensive review of personal loans in India. Our review consisted of researching and analysing more than 60 loans from 35 lenders, which are listed in our table below.

Lenders Reviewed in ValueChampion's Study
Aditya Birla CapitalAllahabad BankAxis BankBajaj FinservBank of Baroda
Bank of IndiaBank of MaharashtraCanara BankCapital FirstCentral Bank of India
CitibankDena BankFullerton IndiaHDB Financial ServicesHDFC Bank
ICICI BankIDBI BankIDFCInCredIndia Infoline Finance LTD
Indian BankIndian Overseas BankIndsuInd BankKarur Vysya BankKotak Mahindra Bank
SBISouth Indian BankStandard CharteredTamilnad Mercantile BankTATA Capital
UCO BankUnion Bank of IndiaVijaya BankYes Bank

After gathering cost data, including interest rates and fees, from these banks, we created an algorithm that compares the cost of borrowing of each loan. Our calculations include mandatory processing and administrative fees, interest costs and applicable promotions. We did not include fees for late or early payments, instead, we assumed that the borrower would make payments on time. Because banks offer loans of various tenures and advertise ranges of interest rates, we calculated borrowing costs based on all possible scenarios in order to develop our list above.

William Hofmann

William is a Senior Research Analyst at ValueChampion Singapore, focusing on banking and SMEs. He previously was an Economic Consultant at Industrial Economics Inc.