Personal Loans For The Self-employed

By Author: Alisdair Cosgrove
Total Articles: 184
Comment this article

If you are self-employed then you may already know how tough it can be. If you are self-employed and you desire to get a loan then you may not be sure if you're eligible. It will probably come down to having the right information and not about actual options.

There is a common complaint voiced by the self-employed about this lack of information when it comes to viable loans. Of course, the lenders will always offer you choices. As a self-employed person, your focus should be on making the right choice.

If you thinking about getting a loan and you're self-employed, it may help you to know how lenders will view your unique employment situation. In the past, when the self-employed have sought out loans, the process was much harder to accomplish and you could expect higher interest rates. Yet, there are definitely signs that this dynamic is changing. As time has gone by, the numbers of people turning away from traditional work to work for themselves have grown. As a result, lenders are offering loans that are more flexible that target a self-employed market.

One of the most common complaints leveled ...
... against the self-employed is that they do not file their tax returns appropriately each year. Often, the self-employed person's account may understate their actual earnings. When looking for a loan, this can directly affect how much you will be able to borrow.

If you are self-employed you should expect the down payment range on your loan to about 20% to 40%. Often, if you are self-employed you will not have a regular or fixed income. Also, lenders will look at the failure statistics on businesses.

For example, one out of five people who choose to change from regular employment to self employment will fail. What this all means to the lender is that the self-employed borrower is a higher risk. The situation can be changed if you are self-employed and also capable of paying a larger down payment to get started in the application process.

Additionally, the self-employed will be asked to provide two or three years of personal and business tax information.

Lenders are concerned especially with credit history when determining how much to give the self-employed borrower. It may also influence on loan to value ratio. Loans are still available to the self-employed despite poor credit ratings. In fact, lenders might qualify them for a higher interest loan.

If you genuinely grasp just how big the range of loan options there are for the self-employ you might see the application process in a different light. Taking the appropriate amount of time to study and compare various kinds of loans for the self-employed will lay the right foundation for making a great decision.
Alisdair Cosgrove interests include mortgages, loans and other personal finance topics and has been writing for numerous years and can find more of his work at the UK site Glitec Finance, offering cheap loans and also a great deals on unsecured personal loans. Visit Glitec today for a great loan offer and to read more articles from Alisdair.