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If you’re wondering How do I get a loan if I’m self-employed, well, listen up. It may not be as easy as if you were employed by a company but it’s doable because you have options and ways to improve your chances greater for loan approval as a self-employed person.

Key Facts:

  • There are over 16 million self-employed workers in the US.
  • Self-employed people get loans all the time.
  • It’s not more expensive for a self-employed person to take out a loan if they have a good credit score.
  • Credit history plays heavily in approval as does proof of income.
  • Gathering important documents before beginning the loan application process is a big help!


Due to past events in the financial arena, lenders and banks have raised the bar on what they’ll approve. Particularly looking at the affordability quotient when it comes to your income versus debt. This is one of the elements that affect your chances of getting that loan. And, the criteria settings can change month by month.

Can I Get a Loan from a Lender Being Self-Employed?

Yes, you can but you’ll have fewer options than those employed by a company. This is where your credit rating can weigh heavily. If your credit history is good lenders look on this so favorably that it can be more important than requirements for affordability.

What Are My Loan Options If I’m Self-Employed?

  1. Personal Loan: This type of loan doesn’t need to be secured with collateral but your credit record is very important. If your credit history is not so great you may need to look at a secured loan.
  2. Secured Loan: If you have a poor credit score, are self-employed, and can’t show a regular income of at least $800/month a secured loan may be your best option. For this type of loan, you put up possessions as collateral like your car, jewelry or house depending on the size of the loan. As you have put up something of value the lender is more confident about extending you the loan and therefore may give better terms than a personal loan.
  3. Guarantor Loan: Get someone else to act as your guarantor- a friend or family member who has good credit.  This could greatly increase your loan approval chances but there are some drawbacks. Lenders usually charge higher interest rates on this type of loan and if you don’t repay your loan your friend or family member that helped you get the loan will be liable. This could hurt an important relationship. Something to think about.
  4. Title Loan: For this type of loan you put up your car as collateral. There’s usually no credit check but very high-interest rates and short repayment time. Plus, if you don’t repay the loan you could lose your car. If this is your only option, get to know the pros and cons of title loans.


How Do I Apply for a Self-Employed Loan?

There is no difference when you apply for a self-employed loan and it’s just like any other loan application. You just need to do a little prep work before you go online to apply.

  • Check your credit score first. If you don’t know then read How Can I Check My Credit Score for Free?
  • Get your bank statements, payslips, or whatever you have that shows your income.
  • Use a lender or lender broker like Funding Zest that uses a soft search to check your credit history which means it doesn’t affect your record.
  • Another advantage to using a lender broker is they do the legwork for you because they’ll find a lender with the best rates and the one most likely to lend to you in your situation.

What Else Do I Need on Hand When I Apply?

The application process may vary slightly but these are pretty standard requirements for most lenders.

  • Identification – driver’s license or passport
  • Address Proof – utility bills, tax bills, etc.
  • Bank statements –
  • Proof of Income – income from your job, rentals, stocks, etc.

If I’m Self-Employed Will My Loan Cost More?

It shouldn’t cost more. The factor that can make your loan more expensive is your credit rating. Good credit rating = Lower Interest rates. Bad Credit Rating = Higher Interest Rates.

If I Have Bad Credit Will I Be Able to Get a Loan?

Remember bad credit could mean a personal loan is not an option and you may need a secured loan or guarantor loan. Having said that, there are lenders who lend to those with bad credit. These loans typically have high-interest rates and you may find they limit the amount they are willing to lend you. Again, this is where a lending broker really helps out and saves you time by checking with several lenders and those more likely to lend to someone with bad credit.

Am I Allowed to Spend My Loan on Anything?

Pretty much. Lots of people spend their loans on cars, weddings, fixing up their homes, and even consolidating their debts. Just make sure that you have a plan to pay back your loan. You could even spend it on 15 Low Cost Small Business Startups for 2022.


Bottom line:

If you’re self-employed and need a loan there are options. A good credit history is one of your most important assets so find out your credit score now.


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