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Things Self-Employed People Need to Know for Getting a Personal Loan

If you are self-employed and want to get a loan, there are going to be some things that you will need to know. This can be a bit tricky, so it definitely helps to get all of the information you can. Thousands of self-employed individuals get loans throughout the UK each year, and there are numerous things to consider before applying. This article will help you get through the process of obtaining a loan with minimal effort.

Income Requirements

You should be prepared to provide lenders with proof of income for at least the last two years. This is fairly standard for self-employed people, but it does require some effort on your part. Make sure that you have this documentation sorted out before you even fill out an application. The lender needs this information in order to determine if you are able to pay back your loan on time. If they deem your income to be insufficient, your application could be denied.

Required Documentation

It is important that you know what sort of documentation you will need to get a personal loan as a self-employed individual.

Some of the information you should have ready when applying for a personal loan include:

  • Driver’s license (you will need to submit your license number)
  • Date of birth
  • Full name
  • Checking account details
  • Proof of monthly income

This information is absolutely required by any legitimate lender, so you will need to have it at the ready. If you fail to provide the lender with all of this information when applying for a loan, you will be denied. The lender might also ask you to provide your tax returns for confirmation of income.

Interest Rates

Self-employed people often pay higher interest rates for person loans, though this is not always the case. The interest rate that you get on your loan will depend on many factors, such as your income and credit. One of the most effective ways to minimize your rate is to shop around and look for the best possible lender. Since each lender will offer you a slightly different rate, you will definitely want to do this research.

Apply Online

If you want to make the process of getting a loan as smooth and easy as possible on yourself, you should apply online. It is very easy to do this and you don’t even need to leave home. First you will have to choose a certain lender that you wish to borrow from. There will be a section on the lender’s site where you can fill out and submit a loan application. This application will ask you for detailed personal and financial information. There might be an option you can select for self employed, which you will definitely want to do.

Choose a Private Lender

Private lenders tend to be far more flexible than banks or even credit unions, so you will need to keep that in mind. The lender you choose is very important, so you will have to do some research. You want to find a lender that is willing to work with you as much as possible. A lot of banks really don’t like to give loans to self-employed people, as they automatically view them as unreliable. There are lots of private lenders all over the internet that you can turn to for the money you need. When you do a decent amount of research into these lenders, you should be able to find one that can help you out.

You Can Get Approved Even with Bad Credit

It might seem like getting approved as a self-employed person with bad credit is impossible, but the truth is that it is not. You can definitely get a personal loan even if your credit score isn’t especially high. Private lenders often give out loans to people with bad credit. These lenders tend to focus more on the income and employment history of applicants. For self-employed applicants, they look at how much money the person is bringing in on a regular basis. As long as your income stream is solid, you should have nothing to worry about.

Final Thoughts

While getting a personal loan might be a bit more difficult for someone who is self-employed, it is far from impossible. You will most likely have to do a bit of extra work, but it is well worth it. Make certain that you take care to choose the right lender to borrow from, because there are lots of options available. The more time you take to do this research, the better off you will be in the end. You should also run the numbers to determine how much you need and whether or not you can pay back the loan on time.

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6 Payday Loan Mistakes That Could Really Cost You

People make all sorts of mistakes with payday loans, and most of them can be avoided very easily. If you are interested in getting this type of loan, you should take the time to learn about some of the things you should never do. These mistakes could really cost you, even though it might not seem like it at the time. Payday loans have become very popular over the years because they are so convenient, but you need to know which things never to do with them.

  1. Choosing the First Lender You Find

You should never borrow money from the first lender you find. Instead you will need to do some research until you have found a lender that you can trust. There are so many of these lenders to choose from that you will need to take care your time. You should take a close look at the reputation of each lender so that you can choose one that is legitimate and respectable. This is not the kind of decision you want to rush into at all. The more time you spend looking for the right lender, the lower your interest rate is going to be.

  • Not Checking Your Credit Report Beforehand

Whenever you are trying to get a loan, you should make a point of checking your credit beforehand. This will allow you to see whether or not there are any mistakes on your report that could be contributing to a low credit score. You can get free copies of your credit reports from each of the three major reporting agencies for free. Make sure that you take the time to go through these reports thoroughly before applying for a loan.

  • Borrowing More Than You Need

Another big mistake to avoid with payday loans is borrowing more money than you absolutely need. This can make paying back your loan harder than is has to be. While it can be tempting to take advantage of your borrowing abilities, you should restrain yourself. Keep in mind that you have to pay interest on the money you borrow, so you should figure out exactly how much you need.

  • Not Applying Online

There are most likely a number of different brick-and-mortar offices you can visit to get a payday loan, but you should go online instead. The internet can provide you with a quick and easy way to apply for a loan. You can fill out an application for one of these loans within a matter of minutes online. These days most people get payday loans this way, and it is by far the easiest method to use. You will save yourself quite a bit of time and effort by doing it this way. There are tons of lender websites that you can apply for a loan on, but you should take the time to narrow down your options.

  • Not Reading the Fine Print

You definitely need to take the time to read the fine print of the contract that you are required to sign with the lender you have selected. This contract will contain all of the important details, such as the length of the loan, total amount with interest, and any fees you will have to pay. If there is anything in the contract that you don’t understand or agree to, let the lender know. Once you have put your signature on the document, it becomes legally binding. Failing to read through the fine print is a huge mistake that you will very likely regret later on.

  • Not Paying Back the Loan On Time

There is nothing worse than failing to pay back a loan on time because of the implications it can have for your finances and credit. Make sure that you will be able to repay the loan before taking it out. You need to take a close look at your own finances and make a decision. If you don’t think you will be able to pay it off by the due date, don’t borrow the money. If you have already taken out the loan and think you’ll be late, contact the lender right away. There is at least a chance that the lender will work with you to get the loan paid off eventually. You might be able to get a small extension on your loan.

Final Thoughts

Getting a payday loan can be a very good idea for many people, but there are still some things you need to keep in mind. These mistakes should be avoided altogether so that you can get the money you need without any extra hassle. Each year thousands of people get these loans, but many of them are not aware of the big mistakes they are making.

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