Finding self employed loans can be tougher than personal loans tailored for employed/salaried individuals, largely due to the higher risk. But, there are still many self employed loans options available in the market that you may consider.
Types of Self Employed Loans
There are a few types of self-employed loans available in the market.
- Specialist Loans
- Standard Loans
- P2P Loans
- Low-Doc Loans
How Do Self Employed Loans Work
Each lender has its own lending criteria that you must fulfill to quality for a self employed loan. Usually, lenders require applicants to submit tax statements for the preceding two years to assess total income. Some lenders might also require collateral to approve a loan, and these secured loans often come with a lower interest expense compared to unsecured options.
Examples of Self Employed Loans
A few examples of lenders offering self-employed loans are as follows:
- NAB – You can apply for a self-employed loan with NAB at a rate of 9.99% per annum between amounts of $5,000-$55,000.
- Westpac – The lender offers loan amounts between $4,000-$50,000 at a rate of 11.99% per annum to self employed individuals.
- St. George – At an annual rate of 12.99%, St. George is offering loan amounts of $2,000-$50,000 to self-employed borrowers.
Advantages and Disadvantages
- Better suited to your financial circumstances compared to loans tailored for salaried individuals
- Allows higher loan amounts compared to non-self employed loans
- Long loan terms available
- Possibly a lower interest rate is applied if you earn a high and steady income.
- Might be tough to meet eligibility criteria
To apply for a self-employed loan, you need to arrange some required documentation including:
- Tax returns
- Information about your business, including financial statements
- Latest bank statements, at least for the last 90 days
- Notice of Assessment
- Rental income proof, in case your business operates any rental properties
Once you have chosen your desired lender, first ensure you meet their eligibility criteria. Then, fill out the online application form or visit the branch to apply in-person. The lender will process your application and review your eligibility. Once approved, the loan amount would be transferred to you within a few days.
- What is the maximum amount I can borrow through a self-employed loan?
Although every lender offers different loan amounts, you can usually get a loan amount between $2,000-$55,000.
- Should I get a secured or unsecured self-employed loan?
A secured loan might have a lower interest charge than an unsecured loan, although an unsecured loan might be easier to acquire.
- Can I apply for a self-employed loan as an independent contractor?
Yes, independent contractors are usually considered self-employed.