Which Loan to Take If a Personal Loan for Self-Employed Gets Rejected

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Unlike personal loan for salaried, which are relatively simpler, lenders in the case of self employed think that if your income isn’t consistent, you won’t be able to make your loan payments on time. Also, banks and non-banking financial companies (NBFCs) have strict rules and regulations that make it hard for most people with unstable incomes to get loans.

This is where fintech and the loans they offer can help you out. Also, here are some ways to borrow money if you have an irregular income and have been turned down for a Personal loan for the self-employed.

 

Gold-backed loans

In the past, gold loans were a common way to get money for a personal loan for salaried, especially in India, where a large portion of the population keeps gold as an emergency reserve. It is a loan that is backed up by gold as a way to pay back the loan. Because the loan amount is usually based on the value of the gold and less on the borrower’s ability to pay back the loan, it is often used to help people who need money but can’t get a personal loan for self-employed or are turned down for one.

 

People with irregular income who haven’t been able to get other loans, like personal loans, can easily get a gold loan. They are given out right away and require little in the way of paperwork and eligibility criteria. So, gold loans are a great way for freelancers, consultants, and other professionals who don’t have a steady source of income to get money.

 

Keep in mind that even though gold loans are given out quickly for a personal loan for salaried, they usually only last for a short time, usually no more than three years. When you get a gold loan. Make sure you have enough money in savings or investments to pay off the loan’s monthly payments on time. If you don’t do this, the lender will take the gold you put up as collateral. In order to get their money back. And if you don’t have enough gold to get a loan, you can still get a loan to get out of a tight financial situation.

 

Loan against properties

For both business and personal loans, residential, industrial, and some commercial properties can be used as collateral. You can get a loan against your property for both business and personal reasons. How much money is given out as a loan is a percentage of how much the property is worth? The loan-to-value ratio given by the lender shows how much money is given out. Loans against property are secured loans, so the interest rates are usually not too high, and the length of the loan can be up to 15 to 20 years. Since they are secured loans, people with irregular income who own property can apply for them. This is especially true if they have been turned down for a personal loan for self-employed.

 

Remember that the loan amount a borrower gets depends on the type of property. The customer’s credit history, the lender’s LTV, and other things. Most loans backed by real estate are for large amounts of money. So it’s important to pay back the loan on time. If not, the lender could take the property that was used as collateral. And sell it to get their money back.

Also, if you need a smaller loan amount and don’t want to put up a property as collateral. You can get a loan to meet your smaller financial needs.

 

Loan against various securities

Unlike personal loan for salaried, these loans are backed by your securities, such as stocks, insurance, etc., and give you cash without letting you lose ownership of the securities you put up as collateral. All lenders give a full list of the securities that can be used to back. A loan that is backed by approved securities. In this group of securities, you can find things. Like Demat shares, mutual fund units, term deposits, listed bonds, insurance policies, and provident funds, among other things.

 

An overdraft feature on a checking account makes these loans possible. The amount you can borrow is based on the value of the collateral you put up. The borrower can take money out of this account. And can also pay it back by putting money back into the account. In general, loans against securities cost less than personal loans. Like loans and credit cards, which have higher interest rates. Because interest is only charged on the amount that is still owed at the end of the month.

 

Keep in mind that a wide range of assets can back these loans. So you must first make sure that the asset you want to use. As collateral is on the lender’s list of approved assets. If this isn’t true, your loan application will be turned down. If you don’t pay back your debt, you could lose the rights to the securities you pledged.

 

Take a credit card loan.

If you have a credit card and your loan was turned down. There is another, less well-known way to get the money you need. It’s a loan from a credit card. Similar to personal loan for salaried, there is no restriction on end usage of funds in this as well.

 

Loans against credit cards are loans that have already been approved. Depending on your credit score, the bank will lend you up to a certain percentage of your credit card limit. Since they have already been approved, they usually require less paperwork. Because the lender already knows your profile from how you use your credit cards. These could be a good way to get credit if you were turned down for a personal loan for the self-employed o even in case of a personal loan for salaried.

 

Depending on the type of credit card and the customer’s profile, the interest rate may be slightly higher than that paid on personal loans. How much of the borrower’s credit card limit has been used up determines how much money they can borrow. On the other hand, some lenders may be willing to give you a loan that is more than your credit limit if they are sure you will be able to pay it back.

 

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