Being your own boss does have some great benefits, but it can make finding a loan more difficult. We’ll explain why here.
There are millions of self-employed people across the UK and working for yourself has lots of benefits. You’re your own boss, you have the freedom to fit your work around your family, you might be able to work from home…
However, it has its disadvantages too. For example, finding a good deal on a loan can be a difficult task. That’s because some lenders may consider you more of a risk to lend to, as your income could be classed as unstable. This means they may be unprepared to lend to you, or borrowing from them could be more expensive.
Whether you’re a contractor, sole trader or run your own small business, a self-employed loan could help you borrow.
Responsible lenders need to make sure that sure you can afford your repayments, so they’ll ask to see evidence of your income. It’ll vary depending on the lender, but you may be asked for as little as 6 months’ proof of income, or as much as 3 years. This could be bank or business statements, a P60, or a finalised accounts statement; again, this will depend on the lenders’ requirements.
Your self-employed loan can be used for almost any purpose. Whether you need to make some home improvements, buy a new car, or pay for school or university costs, it could help.
Perhaps you need a bit of extra help with your business? That could be buying new office equipment, or a van to help you expand – a self-employed loan could help you do this.
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Check NowYes, you could be eligible for a self-employed loan if you have a bad credit rating. Even if you have mortgage arrears, defaults or CCJs registered against you, there are lenders out there that should lend to you.
Just because you’ve been rejected by one lender, it doesn’t necessarily mean you’ll be rejected by another. Each lender has their own acceptance criteria and some specialise in helping the self-employed and those with poor credit.
We wouldn’t recommend applying for lots of loans at once as each application leaves a mark on your credit score.
Yes you can. If you’re struggling to keep track of all of your repayments towards different debts each month, you could use a self-employed loan to pay off all of your existing credit cards, overdrafts and unsecured loans. You’d be left with just one monthly payment instead of lots of different ones.
Please be aware that consolidating your debts with a loan could increase the amount of interest you pay in total, as you’ll be repaying it over a longer period of time.
