The Perfect Loan for Self-Employed Workers

September 13, 2021

The Perfect Loan for Self-Employed Workers

Can I get a personal loan if I am self-employed?

The answer is yes! If you are self-employed, you can receive a personal loan with many possibilities. Many mainstream lenders will lend to self-employed people if they meet their affordability standards and show supporting paperwork.

Several specialist lenders have targeted niche markets such as sole traders and self-employed individuals, which are worth investigating if you need a loan.

How to Make an Application for a Self-Employed Personal Loan

Only apply after you’ve double-checked your eligibility

Almost all lenders now provide an eligibility checker. Almost every lender now has one. A “soft” credit search will not damage your credit score but will help the lender determine whether it is profitable to apply. A “hard” credit check affects your credit score when you apply (a little).

Better yet, check your eligibility with multiple lenders at the same time.

Using each lender’s eligibility checker takes time, but a reputable loan matching service can do the job for you. In seconds, it will check with each lender on its panel to see who would accept you and what rate they’d provide.

Now is the time to check your pre-approved rates

Consider your options. Don’t apply with the first lender you come across, even if it’s your current bank. Instead, always shop around for personal loans to find the one that best fits your needs. Secured loans and credit cards may be better options for you.

Can I get a self-employed loan even if I have bad credit?

Getting a personal loan as a self-employed individual with negative credit is possible, but possibilities are restricted. You’ll also be charged a higher interest rate and may not be able to borrow as much as someone with strong credit.

Like any other loan, you may verify your eligibility and acquire loan estimates before applying for a personal loan to see whether you’ll be approved.

Will the loan be more expensive because I’m self-employed?

Not necessarily. However, if your circumstances present you as a higher-risk borrower – especially if you haven’t been trading for long — you may be offered a higher rate.

Due to greater competition, you may find that self-employed personal loans are no more expensive than regular bank loans. Before choosing a lender, compare all of your options, including the features and terms of your chosen product. For example, a lender’s APR may differ from the advertised “Representative APR” based on your credit score, income, and expenses.

Secured loans for self-employed individuals

If you lack enough work history or income to qualify for an unsecured personal loan, consider a secured loan. This type of personal loan uses the equity in your home as security against the loan’s cost, and it typically has lower interest rates than regular personal loans.

If you are self-employed and work from home, a secured loan may be a better option than attempting to obtain unsecured financing.

What are my other options for self-employment loans?

If you don’t qualify for a secured or unsecured personal loan, or if you can’t find one that meets your needs, you have alternative options.

Self-employment credit cards

Depending on your credit score and the purpose of the loan, there may be a suitable credit card. For example, a 0% purchase credit card carries no interest for up to 30 months but expect to pay significant withdrawal fees.

An interest-free credit card allows you to transfer funds from one account to another without incurring any fees. You must set up and follow a repayment schedule to avoid losing the low-interest period in these circumstances. If you don’t, you may wind up paying a lot in interest.

It would be best if you also considered any annual or one-time costs. For example, to develop credit, a credit builder card starts with a low credit limit, but you can evaluate it after four months.

Loans for self-employed guarantors

A guarantor loan needs a third party (usually a family member or friend) to guarantee repayment if you default. In addition, guarantor loans have higher interest rates than traditional loans and require a credit check (often around 40-50 percent).

Let’s assume the loan is for company equipment or materials (but not stock). In that situation, you could employ asset finance or invoice finance, where a lender lends you money against the value of your company’s assets, such as buildings, vehicles, machinery, and office equipment, or against unpaid bills. However, asset and invoice finance are more costly than personal loans.


For self-employed people seeking personal loans, eligibility restrictions can be intimidating. However, you probably already have proof of income in the form of tax returns, accounts, or bank statements. Some lenders will process and approve your application in less than 48 hours. Understanding your alternatives, the application procedure, and the documentation required to support your application can help you succeed.

Finding a perfect lender match is one of the best things you can do for yourself, no matter what form of loan or financial support you need. SupaSmartLoans can help. Start today, and you’ll be one step closer to getting the financing you need.