Can I get a loan if I’m self-employed?
Yes. It might not be quite as easy though. As lending regulations have tightened, self-employed people have been made to jump through more hoops to get accepted for a loan, and that’s because lenders have to look more closely at affordability before saying yes to any loan application.
Simply put, if you’re self-employed, it can be harder to prove you’ll be able to make your repayments
But don’t worry, it’s not all doom and gloom. At Ocean Finance, we won’t hold your profession against you and we’ll search our panel of trusted lenders to find you the perfect self-employed loan.
Self-employed loan requirements
Any responsible lender will need to make sure that a loan can be repaid before going ahead with an application. So, as a self-employed applicant, you’ll need to provide proof of income. How far back it’s dated will vary from lender to lender and can be anywhere from six months to three years’ worth of statements.
This is one of the main reasons it can be trickier to get a loan if you’re self-employed; because your income might be less stable than your typical 9 to 5 counterpart, which could leave some lenders thinking you’re too much of a risk.
We don’t take that approach though. We judge every application on its own merit and you can get a quick quote right away to see whether or not you’d be accepted. Better yet, it won’t affect your credit score and all we need to know to get started is:
- How much you want to borrow and for how long
- A few personal details like your name, address and job.
Then, we’ll pop the info you give us into our eligibility checker and give you an answer straight away.
How much can I borrow if I’m self-employed?
With Ocean Finance we can search for loans between £1,000 and £10,000 for up to five years.
Unsecured loans are only tied to you and your personal circumstances, and for that reason, the amount on offer is smaller. Without the security of an asset, unsecured loans might sometimes be trickier to access if you’re self-employed.
Self-employed loans with bad credit
As with any type of loan, having a patchy credit history can make it harder (but by no means impossible) to be accepted for the loan you’re after. At Ocean Finance though, we specialise in lending to people with a less-than-perfect credit record and will always do our best, working with our trusted lenders, to find you a self-employed loan to meet your circumstances.
One thing worth remembering is if you do have a history of bad credit, you’re likely to be charged a higher interest rate on your loan to compensate for the risk the lender’s taking when offering you the cash.
There are other things you can do to boost your credit score and odds of being accepted though, like:
- Sticking to all your credit commitments on time and in full
- Making sure you’re on the electoral roll
- Checking your report for any errors (and disputing them if there are)
- Reducing any outstanding debt
- Keeping your credit utilisation ratio to around 30%
- Closing any old lines of credit you no longer use.
Can you get a loan without proof of income?
You’ll almost always need to provide lenders with some form of proof, whether that be a tax return (SA302) and/or bank statements. Without some sort of evidence, lenders can’t assess your affordability and that means they’d be going against financial regulations by lending to you.
How do you show proof of income if self-employed?
It can be difficult to show where your income’s coming from when you’re self-employed and we get that, one week you might get paid in cash, the next it could be a cheque and so on.
If you don’t have proof of income you can show us your bank or business statements to demonstrate you have a steady income.
Self-employed debt consolidation loan
If you’re wondering whether you can use a self-employed loan to consolidate your debts, then the answer’s yes, you can.
If you’re struggling to keep on top of repayments for several debts each month, a self-employed loan can be used to pay off your existing credit cards, overdrafts or otherwise, leaving you with one monthly payment and one lender to deal with.
Some other common uses for self-employed loans include:
- Reinvesting the money back into your business
- Financing a home improvement project
- Funding a new vehicle, wedding, or holiday.