Kolkata: Personal loans is the most popular retail loan in the country. These are unsecured and do not need any collateral asset to be pledged to obtain one. Though in FY25, personal loan growth decelerated to 7.9%, down from 20.7%, the year before (mainly due to red flags raised by RBI due to their risky nature), they remain a trusted source of fund in times of consumption urge or times of emergency cash needs.

Personal loans help in various goals — buying a piece of favourite gadget like phone, AC, fridge, washing machine, tv etc or going on a vacation, getting married or even repairing a house. There are plenty of options to get a personal loan from a bank or NBFC. Most banks chase salary earners with offers to take a personal loan. But what happens when the applicant does not have a regular income. Are freelancers eligible to get a personal loan? What sort of documents does a lender demand from a freelancer seeking a personal loan? Let’s have a look.

Points to remember

One must understand the broad concerns of a lender when a freelancer is asking for personal loan. Since a freelancer does not have a steady income, lenders are cagey about getting their money back. Therefore, the freelancer must offer some proof of income that can take adequate care of the repayment needs. The Income Tax Return, or ITR can come in handy for this purpose. In the absence of salary slips, the ITR can prove to be a significant substitute. Usually ITR for the past three years can be asked for.

Credit score: It is not for nothing that the credit score is considered a financial lifeline in modern times. If an individual has a good credit score the lender can feel assured. Credit scores depend on past credit track record, timely payments of EMIs and judicious use of the credit card. It is also vital that one does not exceed 30% of the credit limit sanctioned for an individual. It shows responsible credit behavior.

The bank accounts of a freelancer must also prove that he/she gets payments for the service he/she renders to clients, though it might not be on a month-to-month basis. If inflows of cash are reflected in the account, it could inspire confidence in the lender.

Often it so happens that freelancers need some cash on urgent basis when some payments get stuck but payments have to be made quickly. In such conditions one often tries to get a personal loan to tide over a crisis. However, repayments have to be made strictly according to schedule in order to be eligible for a future bailout.