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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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