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Personal and Payday Loans for the Self-Employed

There is now greater awareness that in the modern work market many individuals do not work on traditional labour contracts

by Xavier Basil

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A greater percentage of the work force than ever before is now classified as ‘self-employed’. While working as a freelancer or contractor can bring many advantages, freedom to dictate your own work schedule not least among them, fluctuations in cash flow is also often a feature of this particular professional choice. As such, access to financial products such as payday loans can be an invaluable resource to help balance out the peaks and troughs in income flow that the self-employed often have to deal with.

As any self-employed individual knows only too well, the lack of a full-time employment contract often complicates access to and the application procedure for loans. Luckily, there are now services such as Lendersus.com that work with a variety of different lenders and help facilitate loans for those whose work status does not fall exactly within traditional categories. When applying for a loan via this kind of broker, the application is specifically referred to lenders who have products available to the self-employed or other non-standard employment statuses.

As Self-Employed, I don’t have a fixed payday. Is it Still Possible to Secure a Loan?

Certainly. Provided that you are able to show a history of regular income as a self-employed professional, freelancer or contractor there are now plenty of lenders that have products that cater to you. You will be judged on the same affordability criteria as any regularly employed applicant, based on your income record over the past 6 months to 1 year.

As Self-Employed, what proof of income or other documentation will I need to apply for a loan? You will be asked to provide bank statements for the past 3 to 12 months, varying between lenders. This is accepted in lieu of a fixed monthly income and your eligibility will be based on average income levels over the applicable period.

Agreements you may have for upcoming contracts can also be submitted as an additional support to your loan application and you should of course be over the age of 18, have a bank account and permanent residency. Using one of the new generation of handy and affordable accountancy softwareproducts especially tailored to the self-employed will mean you always have documents for any loan or other product that requires evidence of your personal finances one or two clicks away.

As Self-Employed, Will the Value of the Loan I am Eligible for Be Lower?

Not necessarily. The amount you are able to borrow will be assessed against your average income over the period you are asked to provide bank statements for. Some lenders may take into account the fact that your future income levels may not necessarily be quite the same but this can also be mitigated if you are able to provide evidence of future work commitments and the level of income that they will provide. On making your online loan application you will receive a response within minutes on a provisional maximum loan level, subject to your supporting documentation being approved.

My Credit Score is Poor. Can I Still Secure a Loan?

Yes. While a poor credit score will limit your options with traditional personal loan lenders, by how much will depend upon how weak your score is, payday loan lenders are more flexible. A good loan aggregator service or broker that works with numerous lends should be able to help you find a lender despite a poor credit score. You should of course always ask yourself if you will be able to comfortably make your repayments before committing to any loan so that you do not do any further damage to your credit score by missing repayments.

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