Yes, you should still be able to get a loan if you are self employed. Typically, self employed people may find it harder to get a loan as their income may vary on a month-to-month basis. This means that even though it is possible to get a loan, it is usually just more difficult for those who are self employed.
Can You Get a Loan If You Are Self Employed?
You can definitely get a loan if you are self employed. Typically when you apply for a short term loan, the lender will check your income. This is to ensure that you will be able to repay your loan within the agreed timeframe on all of the agreed dates, to avoid higher interest rates ad excessive debt.
When you are self employed, it can sometimes be difficult to assess how much is made on a monthly basis. This is because the amount of income made may vary month to month, meaning that a lender may be unable to see the consistency they are looking for.
Any lack of stability that a lender can see may discourage them from lending money to you if you are self employed. In spite of this, all loans which are available to people who are not self employed are typically available to those who are, but some lenders may be more reluctant to lend to you.
How To Apply For a Loan If You Are Self Employed
If you are self employed, you should apply for a loan in the same way as someone who is not self employed. The same forms are required whether you work for yourself or someone else.
Documents which typically need to be provided include proof of address and ID. The difference between applying for a loan as a self employed person as opposed to not self employed is that you will have to provide evidence of income in a different form.
Rather than offering a lender work contracts, you will be required to share documents such as tax returns or business accounts to prove you have a consistent form of income. These documents should provide the lender with confidence in your earnings and consequently your ability to repay your loan.
In addition to this, you should always get a similar deal as a self employed borrower as you would if you were employed by someone else. Products are not typically available specifically for self employed borrowers.
Can I Get a Loan With a Poor Credit Score If I Am Self Employed?
It is possible to get a loan if you are self employed with a bad credit history, although lenders may be more reluctant to lend to you. You should always be considered for a loan whether you are employed by yourself or another party, and whether your credit history is good or slightly poorer. Loans may also affect your chances of obtaining a mortgage in the future.
Some lenders specialise in working with people who have poor credit scores or records, and therefore will be able to assist you if you apply for a bad credit loan. It is always important to check the interest rates on your loan to ensure you will be able to make the repayments in time based on your predicted earnings if you are self employed.