I had come across several stories highlighting how freelancers and part-time workers struggle to meet even small funding requirements. Now, I experienced it firsthand.
I work as a freelance writer/journalist for two SEO companies. Occasionally, I also write interview-based stories for a local newspaper. My income pattern is irregular, roughly between Rs. 12,000 and Rs. 16,000 per month. That’s considerably lesser for managing expenses in a city like Pune. But, I prefer working on my own terms and keep my daily amount of work limited to 1000 words. Traveling for hours in Pune and handling an unbelievably high workload is not my cup of tea. So, I said goodbye to a full-time office job back in 2014.
Unfortunately, due to a fracture in my right hand, I could not work much during the second half of September, the first half this month. As I wrote less, my income for September, as well as October, dropped drastically. But, my rent share, light bill, groceries, and food bills did not.
My brother does not help me financially; what best he does is pays rent to the landlord in advance and allows me to pay my rent share to him within a period of 10 days or so. He doesn’t tolerate a delay of 15 days or more. The only visible option in front of me is to opt for a personal loan, clear these dues, and save some to cover up expenses expected in November. The amount that I am looking for is Rs. 20,000, for a period of three months.
I checked the websites and apps of almost all banks, fintech apps. And that’s when I understood two policies implemented by most lenders. First, they do not offer credit products to individuals who earn less than Rs. 25,000 in Tier 1 and Metro cities. Second, most banks and fintech firms don’t offer loans to freelancers at all, i.e., applicants who cannot submit company generated salary slips.
Since the beginning of the month, I have applied with Lending Kart, LoanTap, Bajaj Finserv, MoneyTap, Insta Personal Loans, Cash Bull, etc. I also tried my luck with Saraswat and DBS as I have savings accounts with them. But got a standard reply suggesting my profile is not eligible for a loan. I do fit into Home Credit India’s criteria for a loan up to Rs 30,000. But unfortunately, they don’t support Digibank DBS for income account verification. After so many rejections, the song, “He’s such a loser,” from Housefull has become my national anthem.
Already exhausted my “phone-a-friend” option
In January this year, I faced a shortage of funds for paying my home rent, as well as a software renewal. I borrowed a total sum of Rs. 15,000 from my friends with an assurance to repay by August, as soon as I get my TDS refund. That repayment plan has hit a roadblock as the IT department seems to be in no mood to process IT returns and issue TDS refunds anytime soon. Though these three individuals are in no hurry for repayment, I am obliged to repay them within the agreed timeframe (December).
Access to funds is a serious concern
The chances are, millions of other Indians also experience everything that’s happening to me. Most probably, this happens to those who earn below 20k per month. And there are many, many more like me.
A report released back in Sep 2018 had pointed out that 57% of India’s total workforce earns less than Rs. 10,000 per month. That’s a problem, especially for people who do not have gold, real-estate, or anything else to mortgage and take a loan.
My CIBIL score is above 700. I have bank statements reflecting my income in place and ITR for the last two years. All hopes are pinned on Home Credit India if they can somehow verify my DBS statements manually instead of doing so via the app. I am even ready to pay their 20+ percent rate of interest for a loan of Rs. 20-25, 000 with 12 months repayment duration. Perhaps, I am going to have a hard time arranging funds.
Update: I recently wrote a letter highlighting the lack of credit availability for freelancers and pending TDS refunds. The post will be updated as and when I receive a revert from anyone.
Planning to cut down on expenses, save
- Living within Pune city limits does not make sense anymore. I work from home; my clients happen to be from outside the state. I am single as of now. Thus, moving to another locality, preferably the outskirts, can help me save at least 30 percent on the rent share that I pay at present.
- Most importantly, I need to cut down on my fast-food orders.
- Also, opting for annual or six-monthly plans on the internet, Grammarly, and other software can help me save a fortune. For example, I end up paying Rs. 2,200 for a month or Rs. 4,500 on a quarterly plan due to lack of funds, whereas I can pay Rs. 10,000 and go for a yearly plan.
- Lastly, I think a credit card against a fixed deposit can help me improve my credit ratings.
If anyone has suggestions or knows lenders who can help me out, please feel free to email me: email@example.com
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