Loans for Self Employed
Applying for a loan is tough even when you have an income source. Lenders would have to evaluate a variety of factors to determine your creditworthiness, or if you are able to repay the money you owe. This is why a source of employment or any steady stream of income adds a lot of weight to your application process for a loan. But what if you have no source of income or employment to show for? Can you still qualify for loans for self employed?
A self employed loan, or that which is given to individuals with no employment, is one of many types of loans that we can assist you with in Money Pig. Our extensive panel of lenders can provide financing assistance to individuals across all backgrounds and financial status. If you are looking for a loan but you have no income or employment, you might want to consider taking out loans for self employed.
What is Self Employed Loan?
To obtain a loan, you must pass eligibility requirements and assessment procedure by the lender. This step is important to determine your capacity to make repayments on the loan. But it does not mean that you won’t be able to receive financial support if you are unemployed or is self-employed. Things might be trickier but it does not mean impossible. You need to educate yourself about how it works and how you can qualify.
First things first, if you cannot provide documents for employment, you can use document to prove your income instead. There are a number of possible documents that you can use such as your tax form, identification, or any other financial statements (such as bank statement or business sales).
With the rate of self-employment growing in the past decade or so, lenders in the UK are also more open to working with individuals who are self-employed. In the UK alone, there is a rise in this sector of the employment industry and it is applicable to all regions. In fact, the Office for National Statistics has cited that the number of self-employed individuals in the UK has grown from 3.3 million in 2001 to 4.8 million in a 6-year span. You can expect this figure to continue growing in the next few years or so!
The opportunity to become your own boss is attractive to most people. There are a number of categories that make you fall under the self-employed criteria: 1) if you are a sole trader, 2) if you have engaged in a business partnership, or 3) if you set up your own limited company. If any of these apply to you, then you are most likely a self-employed individual.
Obtaining a self employed loan is therefore inevitable, especially for business proprietors. You need the financing support in order to build or expand on your business. When applying for a loan, you can use the funds for whatever purpose you see fit. Make sure to specify that when you send in your application for a loan to increase your chances of approval. It is one of the best loan types available out there that enable small to medium enterprises to succeed.
Steps to Apply for Loans for Self Employed
If you are looking for self employed loans, it is important to know the step-by-step process. This will help you prepare for the essential documents and steps to improve your chances of approval:
Step 1: Check your eligibility first.
All lenders in the UK have pre-determined eligibility criteria for self employed loans. Make it a habit to check that list to determine if you qualify for this type of loan. In some cases, you will be asked to provide basic personal and financial information in order for the lender to conduct a ‘soft’ credit check that won’t affect your credit score. Based on the initial credit check, the lender will be able to determine if you qualify or not. This will help you assess if it’s worth applying or not.
Only when you submit your official application will a hard credit check be performed on your account. The hard credit check is used to determine your interest rate and the allowed repayment terms for the loan.
Step 2: Ask quotes from various lenders.
It is important that you get a quote from as many lenders as possible. This will ensure that you can get an idea of the prevailing interest rates on loans from various UK lenders. It gives you the opportunity to select the lender that offers the most favorable rate for your loan.
If you can find a loan broker like Money Pig, this will save you time because you no longer have to do the research on your own. You will be matched with lenders that offer self employed loans and get a quotation from every possible lender. The best part is that you can get a quotation from them without any obligation or fees.
Step 3: Weigh in your options.
This is primarily the reason why you need to do a thorough research and comparison of your options. Do not settle for the first lender you find – or one that has approved your application. Always compare a range of lenders to see which can provide you with the best interest rate.
It is also important that you consider a variety of loan alternatives, not just personal loans. You can also try applying for secured loans or business loans for self employed (depending on your purpose).
Additional Tips and Reminders
If you are self employed and are in need of a loan, looking at the eligibility requirements imposed by lenders might seem daunting. But don’t fret – there are many options when it comes to lenders in the UK that offer loans for self employed. It is all about finding the right lender that can provide you with the money you need for whatever purpose you intend.
You won’t have to worry about qualifying either because most lenders will approve your loan application if you can provide the necessary supporting documents. If you have a bank account and you can provide bank statements to prove that you have sufficient funds to pay the loan, then you need not worry about getting a loan. If you can find the right lender, you might even get your loan in 24 to 48 hours, especially since many lenders now process applications online. It makes it easier to process loan applications and you can get the feedback in a short amount of time.
The best thing you can do is to look at the eligibility requirements outlined by each lender. This will inform you of the processes involved and what the necessary qualifications are. Another trick is to use the services of an online loan broker like Money Pig.
Money Pig serves to bridge borrowers to our panel of legitimate lenders in the UK. We can help you save time since you no longer have to do your own research on lenders that can provide self employed loans. Instead, we will process your personal information and match you with the right lender from our wide network of certified lenders in the UK. You won’t have to worry about dealing with fake lenders and scams that will try to exploit your situation. With us, you can trust that we only deal with legitimate lenders so you are protected, as well as your information.
By streamlining the application process, you instantly improve your chances of qualifying for loans for self employed individuals. You can even select from our lenders based on the quoted interest rate so you can choose ones that can give you the best rate. This is possible without you paying a fee – our service is at no cost to you.
Frequently Asked Questions on Loans for Self Employed
Are you a self employed individual looking for a loan? You have come to the right place! Check out some of the most common questions that self employed individuals face when trying to find a loan:
- What information is needed when applying for loans for self employed?
- Is credit check required for loans for self employed?
- Can I get a personal loan without proof of income?
- Do I need to have a bank account for self employed loans?
- What are the eligibility requirements for self employed loans?
- How can I get the best rates for self employed loans?
- If I’m in financial difficulty, can I still get self employed loans?
- Will loans cost me more because I’m self employed?
- Can I get a self employed loan with bad credit?
- How much can I apply for in self employed loans?
- Is there anything to avoid when applying for self employed loans?
When you apply for a self employed loan, it is important to provide all the necessary information for the lender to evaluate your application. Among the basic information that you have to provide during application are the following: the amount of money you wish to borrow, the repayment term (how many months), purpose of the loan, personal details (such as full name, birth, and address), marital status (and number of dependents, if any).
At Money Pig, we will use this information to match you with the right lender that can provide you with self employed loan. The lender might ask you for any additional proof of income to support your financial capacity, even without regular employment. A few examples of that would be tax documents or bank statements. This is needed by lenders to prove that you can afford to repay the loan.
The credit check is an important step for all types of loans. Any lenders that promise you they won’t perform a credit check are either lying or illegitimate. A credit check is required by law so it is a necessary step that you will have to go through during loan application.
But when you are still comparing various lenders and getting quotes from them, they will only conduct a soft credit check. This will not impact your credit rating in anyway. They will only use the information to assess if you are qualified and if approved what your approximate interest rate will be. The final rate will be determined once you pursue the loan application and they conduct a hard credit check. The hard credit check will give them access to more detailed information about your creditworthiness.
You can apply for a loan as self employed but you need to show proof of income or financial capacity to pay. If you do not have a pay slip, you can submit your bank statements or tax documents instead. Providing a lender your income documents is a necessary step because it enables lenders to assess a borrower’s ability to repay the loan. Without this document, you might not get approved for a loan.
A bank account is not absolutely necessary when applying for loans for self employed. Some lenders will require it but others won’t. Providing your bank account would facilitate for easier transfer of funds when you are approved, though. If you are approved for a loan, the lender can deposit the requested amount in a matter of hours or within a day.
There are also a few lenders in the UK that cite a bank account as one of the requirements to be eligible for a loan. If you are looking for a loan without a bank account, you might have to settle for high-interest loans for the self-employed. If you do not have one, make sure to open your own bank account first.
If you are looking for a personal loan for self employed individuals, there are different set of eligibility requirements set by the lender. But most lenders will share the following eligibility criteria among them: 1) must be at least 18 years old, 2) must have a valid bank account in the UK, 3) must be a UK resident, and 4) must have proof of income (or income documents such as bank statement or tax form).
The above examples are the minimum eligibility requirements set by most lenders in the UK for anyone looking for loans for self employed. Other lenders have additional requirements such as a minimum credit score requirement. It is important to check the requirements by a specific lender to increase your chances of approval.
If you want to get the best rates on self employed loans, it is important to maintain a good credit rating. Your credit score is one of the things that UK lenders will look into to determine your interest rate. The higher your credit score, the better the rates that you can get. This is even more important if you are a self employed individual because the lack of a steady income can make you a risky borrower.
If you are in need of a loan for self employed individuals, make sure you work on improving your credit score first. Otherwise, applying for a self employed loan when you have bad credit would mean that the lender will be able to offer you the loan with a high interest.
At Money Pig, we can connect you with a wide network of legitimate lenders in the UK. If you improve your credit rating and you have proof of income as self employed, you put yourself in a position to qualify for the best rates possible.
If you are experiencing financial difficulty as a self-employed individual, it might be the time to evaluate your current expenditures and overall financial health. If possible, try to avoid taking out a loan since it will only aggravate your financial situation. It is also a practical step since taking out a loan when you’re already in financial difficulty might not be the smartest move (or you could end up having more difficulty from having to meet repayments for the loan).
If you have a low disposable income, applying for self employed loans will hurt your finances (and your credit score) even more. It is best to seek advice from experts when you are dealing with financial difficulty. Get all the help you need first or consider other alternatives that would help you overcome your current financial difficulty.
Not necessarily – if you meet the criteria set by the lender, then you qualify for competitive interest rates on the loan. Hence, it is important that you provide all the necessary documents (particularly your income documents) upon submission of loan application. The only way you can get high interest rate is when you have a low credit score or if you have not been trading for too long. In these cases, you will be considered a high-risk borrower.
Due to the increase in demand for this type of loan, you will notice that the rates are no longer as expensive as they used to. The availability of more lenders in the UK is another reason for this. Make sure you take advantage of the fact that there are more lenders available in the UK now than ever before. Do a thorough comparison of various lenders until you can find ones that can provide you with the best rate. The APR that you will be offered by the lender might be different from the representative APR so do not use that data as basis for comparison.
Qualifying for a loan as a self employed individual is still possible even with bad credit. However, you will soon find out that your options are limited – and the options available are ones with higher interest rates than you would expect from someone with good credit score. If you want to get competitive rates, it is important to maintain good credit standing. On the other hand, you might not be able to borrow a significant amount of money when you have bad credit.
As with any loan, it is a good idea to check your eligibility. Many lenders in the UK have a loan calculator facility in their website. Use that to determine the amount of loan you qualify for and the corresponding interest rate. This will give you an idea of how much money you can borrow with bad credit.
The amount that you can qualify for as a self employed individual will vary based on a number of factors. It will be up to the lender’s assessment of the personal and financial information you provided, as well as the amount that you asked for during application.
When specifying the amount that you want to borrow as part of your loan application, it is important to evaluate if you can afford to repay that amount within a specific time frame. If not, you might want to re-evaluate as the lender will most likely not approve the loan (or approve the loan at a lower amount).
One of the things that are often overlooked by self employed individuals looking for a loan is the loan purpose. Lenders ask borrowers about the purpose of the financing to determine if the amount is justified.
At the same time, you can use this as an opportunity to assess if the amount is really what you need for the intended purpose. You would not want to take on more debt than you need. It is important to be honest to yourself about how much you need and how much you can afford to repay. Otherwise, you will be in too much debt!