Tips How Self Employed can avail Higher Amount Loans easily

Financial needs can arrive at your doorstep at any time. Some lenders are ready to help you with finances with different types of loans at this time. However, lenders prefer approving a higher amount of loans for people who own a secure job over self-employed borrowers. Thus, if you are self-employed, you face this difficulty when you want to borrow money to invest in your business or meet any financial needs. 

How to avail a high amount of loans in such cases? Read the following tips to get your answer: 

Apply for a loan against property (secured/Collateral loan)

If you are self-employed and looking for an unsecured loan, there are more chances that the lenders will reject higher amounts. But if you own assets, you can avail of higher amounts by offering them the security to the lenders. You can get a loan of as much as 60 to 80 per cent (depending on lender) of your current property valuation if you opt for a loan against property. Mortgaging your property will give an assurance to the lenders that you will return the money, or else they can take over your property if you fail to repay the loan amount.

Focus on maintaining a decent credit score

As you are self-employed, the lenders might face issues trusting you for repayment. One way to build trust is to maintain a good credit history that ultimately reflects in your credit score. A credit score is a three-digit number that speaks about your financial stability and credibility in the market. A credit score of 750 or above is considered decent, and if you maintain it, there are chances that you can get high-amount loans. This can also help you avail discounts on personal as well as loans against property interest rates.

Pay off all the debts.

Debts will have an adverse impact on your credibility. The lenders will get a chance to think that they will risk their money if they lend it to you. Further, unpaid debts will eventually reduce your CIBIL score. Hence, pay off your business debts, personal debts, and any such debts on time to improve your creditworthiness. 

Prefer paying off your previous loans before applying for a new loan

Try to repay all previous loans before applying for a new loan. Ideally, your EMIs do not add up to more than 20% of your monthly income. Lenders always go through your income and expenses before deciding the loan amount. If you have less cost going to your EMIs, there are higher chances of getting approval for high-amount loans. Further, paying off all the previous loans will eventually help to increase your CIBIL score.

Avoid applying for a loan before two years of your business start-up.

If you own a business start-up, wait for two years before applying for higher loan amounts. Statistics state that 40% of small businesses fail to survive for more than two years. And thus, the lenders do not trust small business start-ups. Hence, they avoid paying higher amounts for the loans of such self-employed people who own a business start-up with an age of fewer than two years.

Building cash reserves can be beneficial.

If your business has enough cash reserves, the lenders will get an assurance that even if your business falls off, you will be able to repay the amount that you have applied for. Thus, work hard to build enough cash reserves. And this can bring you two advantages: One is your borrowing capacity, and eligibility will increase, and the other is that you can face every financial challenge that you may encounter in your business.

Be prepared enough to offer a large down payment.

If you are ready to pay a significant down payment for the loan you wish to avail, the lenders will get an assurance that you will repay the amount that you have applied for. This also improves your creditworthiness in the market. Further, the lender will also come to know that you are serious about the purchase. Hence, get some extra money on your hand and then ask for the loan to increase the chances of approval for the maximum loan amount.


It is a myth that if you are self-employed, you cannot avail of high-amount loans. If you follow the tips as mentioned here, you will surely get approval for your required loan amount. Further and also get a higher loan amount at a low rate of interest, applying for a loan against property is the best option if your financial requirements are higher than the maximum limits of the market’s loans.  

I hope this article will help you.

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