Month Self Employment Income Statement (Profit: Fill & Download for Free

The statement that only salaried employees can avail personal loans is a myth. Getting a personal loan in Delhi[1] is incredibly easy, even if you are self-employed. If you are self-employed, you take the same steps to apply for a personal loan as a salaried person.Here are the typical eligibility criteria:You should be a residing citizen of IndiaYou must be 21-60 years of ageThe lender will consider your yearly profit after tax, annual turnover and certain other factors to determine your eligibility.CIBIL score of at least 750The documents you will need to apply for a personal loan are listed below. Do remember that these will vary as per the lender:Copies of your PAN Card, Government-recognized address proof, identity proof, and bank statementsDuly filled and signed personal loan application form with your recent passport size photographProof of stable incomeBank statements of the last 6 monthsA copy of FORM-16 of Income tax returnsAudited copies of your business’s financial statements.The lender will scrutinize your financial history, repayment capacity and credit score before approving the loan.Footnotes[1] Personal Loan in Delhi NCR

As a self-employed person, you’ll file Schedule C with your tax return (assuming you are a sole proprietor of your business). The net profit you report on this form, with some possible adjustments, is what the lender will use to qualify you for a mortgage.You will have to prove that you are in fact self-employed. You can do this by means of a business license, web page or letter from your accountant. The lender will want to know that you have been self-employed for at least one year, but in the same line of work for at least two years.I am describing guidelines for a “conforming” loan—one that will ultimately sell to Fannie Mae or Freddie Mac. There are other types of loans, called “portfolio loans,” that may have different guidelines. We are beginning to see “bank statement” loans reappear int he portfolio world. These are loans where you document your self-employment income by showing your bank statements for a year. You will still have to produce tax returns for these loans, however, and the lender will obtain tax transcripts from the IRS to verify that the returns every borrower submits are the ones they actually filed.Lenders approve loans based on loan-to-value ratio (DTI). We calculate this number by adding up the total housing expense (Principal, interest, taxes, insurance plus mortgage insurance and/or HOA dues, if any) and any debt payments with 10 months or more remaining. This is called “total debt.” That sum, divided by gross monthly income and expressed as a percentage, is the DTI. 45% is typically the maximum, but some lenders may sell their loans to different investors with different requirements.Thanks for the A2A!

There really is no “best” way. Lenders have to follow underwriting guidelines for Self Employed persons, and qualify them based on those rules.But, that said, Self Employed people generally do have a harder and longer process of being approved for a loan due to the fact that they don’t have a fixed salary or hourly wage. Underwriting takes a bit more effort.Except for certain professionals, most Self Employed persons must have at least 2 years of experience in their field of business to be approved based on their Self Employed income.The lender has to rely on that business owner’s current year Profit and Loss Statements and the most recent 2 years of Tax Returns. The underwriter will then average the 2 years of income shown on the tax returns and then divide the net income (by 24) in order to come up with a monthly income amount. It’s this number that will be used to qualify the business owner. At this point the process of being approved is relatively the same as any wage earner.Credit scores and other factors are looked at just like any other borrower.Sorry but there is no magic pill you can take! You must meet the guidelines for self employed persons, and if you do, you get your loan!