There are currently over 1.2 crore freelancers and gig workers, and approximately 8.4 crore salaried employees in India, as per a report of the Centre for Monitoring Indian Economy. While their employment profile differs from one another, their need to get a personal loan can remain the same. However, there are differences between a personal loan for freelancers vs a salaried individual.
Salaried applicants benefit from stable income, whereas freelancers must demonstrate consistent earnings. In this blog, we will understand the key differences between a personal loan for freelancers vs salaried individuals.
A personal loan for freelancers is an unsecured loan that provides financing to self-employed professionals or individuals who earn money by working independently, doing projects, or providing business services. Freelancers do not earn regular monthly salaries and therefore lenders evaluate their income stability, tax returns and credit history before issuing a loan.
Personal loan to salaried people is a type of unsecured loan that is provided to individuals who have a fixed monthly salary with an employer. It is also among the most readily available credit facilities since consistent income and regular payroll cheques are a guarantee of the ability to repay.
Here are the key differences between a personal loan for salaried vs freelancers that you must consider:
| Parameters | Salaried Individuals | Freelancers/Self-Employed |
| Income Source | Fixed monthly income | Variable income provided by clients or business projects |
| Loan Eligibility | Income Tax Returns (ITR) last 2-3 years, bank statements, and GST filings | Comparatively difficult due to income instability |
| Documents | Salary slips (last 3-6 months), Form 16, bank statements | Depends on the average annual income |
| Interest Rate | Generally lower due to reduced risk | Slightly higher because of volatility in income |
| Loan Amount | Higher loan amount based on salary | A credit score is important as there is no evidence of a fixed salary |
| Tenure Options | Higher | Lower |
| Approval Time Faster | Pre-approved offers and instant verification | Takes slightly longer time for approval |
| Credit Score | Supported by employment stability | A credit score is important, as there is no evidence of a fixed salary |
| Collateral Requirement | Not required | Not required |
At DMI Finance, we offer personal loans to both freelancers and salaried individuals. We follow a simple eligibility criteria to ensure you have easy access to personal loans. Apply for a personal loan with DMI Finance and get up to ₹5 lakh for all your financial needs.
1. Can freelancers get a personal loan without filing ITRs?
Yes, freelancers can get a personal loan without filing ITRs by providing other income proofs, such as bank statements or client billing.
2. Why are freelancers offered a higher interest rate on personal loans?
Since their income is not fixed, lenders view them as riskier borrowers and thus modify the interest rates accordingly.
3. Do lenders treat self-employed professionals like doctors or architects as freelancers?
No, doctors, architects, and freelancers typically qualify as “self-employed professionals.
4. Can a freelancer apply jointly with a salaried co-applicant?
If the lender allows, the presence of a salaried co-applicant with a stable income can enhance eligibility and result in better loan terms.
5. How can freelancers establish income stability?
Freelancers can provide bank statements, client agreements, invoices, and ITRs demonstrating regular income over a long period.
6. Does often changing jobs affect the eligibility of a salaried person for obtaining a loan?
Yes. Changing jobs frequently could point to instability, and this could reduce the possibilities of approval.
7. Can freelancers get a personal loan for business purposes?
Yes. Freelancers can use the funds flexibly for buying equipment, marketing, expanding the business or managing working capital.
8. How long should freelancers be working before availing of a personal loan?
With DMI Finance, you can get an approval within a few minutes of submitting the loan application, and the direct disbursal into your bank account.
9. Can freelancers get fast personal loan approval online?
Yes, if they have strong financial documents, a good credit score, and a stable income flow.
10. Do lenders offer different repayment options for freelancers?
Yes, in certain situations. Flexible EMI or step-up repayment plans are available to match a freelancer’s variable cash flow.
| Personal Loan of Different Amounts | ||
| ₹50,000 Personal Loan | ₹1 lakh Personal Loan | ₹2 lakh Personal Loan |
| ₹3 lakh Personal Loan | ₹4 lakh Personal Loan | ₹5 lakh Personal Loan |
