How Can Proprietorship Company Employees Avail a Personal Loan?

Avail Personal Loan

Avail Personal Loan

Introduction

People need to take personal loans to meet inevitable financial requirements from time to time. For example, If you are out of cash at the end of the month, you can’t postpone a medical treatment due to the lack of the required funds. Doing so will lead to unpleasant consequences and cause tremendous losses. Credit card bills, loan EMIs, different utility bills, and other expenses are also critical. We need the immediate availability of funds to pay such bills and lead a comfortable life.

Taking a personal loan is one of the most convenient ways to raise additional funds. However, working with proprietorship companies may land you in many problems while applying for a loan. As a single person owns and operates a proprietorship company, banks and financial organizations are always sceptical about its stability, legal status, revenues, and survival in the highly competitive business market. If something terrible happens to the company owner, the entire business suffers faster.

If he doesn’t return to work for any reason, the business organization can face the danger of a total shutdown. Employees working with such an organization always have an unpredictable future regarding employment and salary credits. If such a company suffers from heavy losses and is on the verge of a complete shutdown, the bank will turn down your application for personal loans.

The proprietorship company’s financial stability and smooth functioning (with which we are working) are essential for loan repayment. Suppose the company doesn’t work correctly and is struggling to pay salaries to its staff. In that case, the bank and financial organization get the impression that issuing a loan to its employees is a significant risk. If you happen to be an employee of such a company, what are your chances of getting online personal loans? Let’s debate now.

  • Make Sure You Work With A Registered Business Organization.

For the last couple of years, the government of India and different state governments have been encouraging people to resort to intrapreneurship/ entrepreneurship. They have launched several schemes to help people financially who dare to relinquish settled jobs and try their luck in the business world. As a result, many people succeed in the business world and employ other working professionals. But everything is not as pleasant in the business world as it looks externally. Around 80 to 90% of startup companies fail five years after launch.

When you apply for loan online, Bank executives check your organization’s profile and determine its credibility in the business market. They will never hesitate to quash your loan application if the company (you are working with) doesn’t satisfy them. Therefore, applicants must ensure that they are employed with a registered business organization in India. Business registration ensures the legal status of a company and the financial well-being of its owner. The older your company is, the more trustworthy it is in the eyes of banks and financial organizations. Always keep in mind that stable employment with a registered and smooth functioning company improves your chances of getting approved personal loans online.

  • Prove Your Eligibility For Online Personal Loans

Personal Loan Eligibility

While working with a proprietorship company; you must fulfill the eligibility criteria to get personal loan.

  • Indian citizenship,
  • Stable employment with the company for at least two years,
  • Regular monthly salary starting from Rs 25,000,
  • Good credit score(700-900), and
  • The applicant must have his own home.

Note: You must display all sources of income to be approved for personal loans. Salary credits in proprietorship companies may be irregular due to fluctuations in business. The bank must understand that you have sufficient income every month from different sources to make loan repayment comfortably.

Also Read : What Are Short-Term Personal Loans, and How Can You Take Care of Them?

  • Arrange All The Required Documents

Personal Loan Documents

You need to arrange the following documents to apply for online personal loans:

  • Personal identity documents,
  • Employment contract papers,
  • Homeownership documents,
  • Bank account details,
  • The most recent salary slips,
  • Business registration proof &
  • Credit score report.

 

  • Choosing A Bank

Choose a Bank

Different banks offer instant personal loan to all eligible borrowers on demand. Their offers differ from each other based on the loan amount, interest rate, eligibility criteria, terms and conditions, processing fee, repayment period, application method, etc. So you must visit the website of different banks and see what they are offering and with what conditions. A default offer of a personal loan may not suit your budget and requirement.

A detailed and comparative analysis of different loan packages will help you choose the most suitable loan scheme for yourself. It would help if you selected a bank with a good track record of offering needed money to borrowers with fewer formalities and terms and conditions. ICICI Bank, SBI, HDFC, IDFC, Punjab National Bank, the Bank of India, Central Bank, Axis Bank are leading financial organizations that offer personal loans to many needy people in India.

  • Apply Online For Instant Personal Loans

Once you complete the initial work, start applying for a personal loan by visiting the bank’s website. Submit the required information in an electronic application form, review it for all errors, make the necessary corrections, upload documents, and send the form to the banker. You get a reference number for the successful submission of your application.

When bank executives come across your application, they will review it from different angles and call you if they consider your profile. They will take their time to verify all the supplier information and check for possible errors or incorrect information. The bank will invite you for interviews and the verification of documents. It will also conduct background checks to know your financial background and all the loans you have taken in previous years.

You must answer all questions asked by bank executives and complete all formalities successfully so that they can get the impression that you are a responsible credit borrower. Once everything is finalized, the Bank executive will prepare the loan agreement, which comprises all terms and conditions between you and the banker. Go through the agreement paper in detail and ensure that the deal is in your favour. Ask for clarification if you don’t understand a particular financial term and its implications. Once you understand all clauses of the loan agreement, give your nod to the banker and sign the paper. The bank will take further steps to release your amount in 3 to 4 business days.

Also Read : Things To Know Before Opting For Home Improvement Loan

Practical Tips To Get Approved For Personal Loans

Every year, many individuals apply online for instant personal loans, but only a few of them get the requested money successfully. Your claim for the much-needed personal loan may become quite fragile if you are employed with a proprietorship company. Banks give personal loans only to the most suitable credit borrowers. They will not hesitate to reject your application for the loan if you don’t fit their criteria. You should take the following steps to improve the chances for the approval of your application:

  • Ask For A Reasonable Amount As A Loan

Reasonable amount

Often, Bank executives reject loan applications because borrowers ask for a hefty sum as a loan and are not in a mood to accept the revised offer. For banks, your repayment capability matters a lot. They will have a look at your overall monthly income, employment record, monthly expenses, pending bills and EMIs, and the total number of people who depend on your income for survival to determine the loan amount you can quickly pay off. It will never offer you a loan that is far beyond your overall income and cash reserves. It is your responsibility to analyze the need for additional money and demand a moderate sum as a loan.

  • Error-Free Loan Application

Error-free loan application is essential to get personal loans without difficulties. This is because banks get lots of applications from many borrowers. So they expect you to provide accurate information, submit required documents in just one call, complete all formalities and cooperate in the verification process. If you are applying for a loan for the first time or don’t know how to apply for personal loans online, take the help of independent loan experts, see tutorials on YouTube, and read the informative article available on the web. Then, apply for personal loans online step by step and follow the instructions given by bank executives. Successful submission of the application increases the chances of approval of your application.

  • Collateral Submission Against The Borrowed Money

Although personal loans don’t include the collateral submission criteria, your employment with a proprietorship company makes it necessary up to a great extent. The presence of collateral ensures banks about timely loan repayment. Here are some options:

Collateral Options

Brief Explanation

Gold Gold is a precious metal, and its prices continue to increase with each passing year. Placement of gold as collateral against the loan helps you get approved for personal loans. Timely repayment of the loan is mandatory, failing which the bank will seize your gold.
A costly vehicle To take a personal loan, submit the vehicle ownership document to the bank. Bank executives will evaluate your income the vehicle’s overall reselling value and approve a  loan amount accordingly.
Land ownership documents The price of land continues to grow every year. So you can use land ownership documents as collateral and get an online personal loan comfortably. The papers should be under your name and free from litigation.
Use your shares in the company Many employees buy a certain percentage of shares of the company they are working with. It helps them increase their income and become business partners after meeting the required criteria. You can use them as collateral against the borrowed money if you have company shares.
Investment documents If you have invested in the share market, life insurance policies, and mutual funds, you can use investment papers to strengthen your credit profile and get a considerable sum of money as a loan. The bank will evaluate the total value of investment papers and issue a loan accordingly.
Fixed deposit Fixed deposit is a financial lifeline for many Indians. They can use it to cover essential expenses and deal with multiple economic challenges. You can use a fixed deposit as collateral against personal loans and get the requested money. Depending upon your profile, income status, repayment potential, the strength of fixed deposit, the bank can offer 70%-80% money as a loan.

 

  • Dealing With Private Money Lenders

If you fail to get a personal loan from mainstream banks and financial organizations, dealing with private money lenders is not a bad idea at all. First, you should look at the profile and deputation of different private lenders available in the market and seek independent reviews about their functioning. Then, choose a private money lender and submit your application.

The loan application method remains the same as you encounter with traditional banks and financial organizations. Simple application method, immediate response from the moneylender, minimal processing, quick loan approval, and instant release of approved loan money are some of the benefits you enjoy while dealing with private money lenders. However, they charge higher interest fees on the borrowed money, making the loan very expensive. And, the loan recovery process is aggressive, which you may not like.

Conclusion

Regular employment and stable monthly income are the two most important conditions for applying for instant personal loans. Nevertheless, employment with a proprietorship company doesn’t mean that you will get preferential treatment from banks and financial organisations. Due to the unstable economic condition and unclear future of proprietorship companies, employees are often kicked out of a job, their salaries are put on hold, and significant employment gaps. Therefore, you should follow the above recommendations tips to make your profile more assertive and get instant personal loans comfortably during financial emergencies while working with a proprietorship company.