A Guide to Getting a Personal Loan While Self-Employed

Can I Get a Personal Loan if I’m Self-Employed?

If you are self-employed, it can often be more difficult to secure a personal loan. This is because there is typically more risk involved when lending to a person that is self-employed, as their income can be considered ‘unpredictable’. A study by the Australian Bureau of Statistics revealed that 60% of small businesses fail within the first three years; with these figures in mind, it is clear why lenders may be apprehensive about lending to self-employed individuals.

Can I get a personal loan if I’m self-employed?

While there are some lenders that may not offer personal loans to self-employed people, there are still a plethora that do. For example, Nifty Loans offers personal loans for self-employed people up to $10,000. Lenders typically review your credit, income and other factors before approving your application. If you are self-employed and may have fluctuating income, you must be able to assure your lender that you will not have trouble repaying your loan. There are some ways you can exemplify your capacity to do so which will be discussed below.

Have your finances in order before you apply

If you have multiple sources of income, including rent, shares or other investments, ensure you do your research beforehand to ensure these incomes are accepted by your lender. You should also show a good savings history, in the case that your income stream lessened so that you are still able to make repayments comfortably. You will likely need to provide copies of your bank statements, so ensure that your total income is clearly visible.

Check your credit score

It will be most helpful if you have a good credit history. Having a good credit history demonstrates to lenders that you have managed credit well in the past, and will likely increase your chances of approval. If you have bad credit, you will still have personal loan options; however, these will be more limited and will likely accompany high interest rates.

Find a flexible lender

If you are self-employed with an irregular income, you may wish to find a lender that is mindful of this in their repayment schedule. You may wish to have the option to make additional repayments when your income is higher, and fewer repayments when your income is lower. You should discuss these options with your lender prior to applying to find out whether this is possible. 

What are my options for self-employed loans?

There are different types of loans that are available to you as a self-employed Australian. You may wish to consider and investigate the following options:

  1. Standard personal loan (secured or unsecured)
  2. Low doc loans
  3. P2P loans
  4. Specialist loans

Standard personal loans

A standard personal loan is simply a normal personal loan that you would apply for whether self-employed or otherwise employed. There are two main types of personal loans: secured loans and unsecured loans.

Secured personal loans are loans that are secured against something you own, such as a car, motorbike or caravan. This asset is used as collateral against your loan so that, in the case you were unable to repay your loan, the lender is able to cover their losses.

Unsecured personal loans are loans in which the lender agrees to lend you money without the attached collateral, and is completely subject to your individual capacity to repay your loan.

Typically, secured loans accompany lower interest rates due to the security provided to the lender, with unsecured personal loans respectively having higher interest. 

Low doc loans

Low doc personal loans are designed for borrowers that may not be able to provide all the needed documentation for their loan application, such as self-employed people, business owners, people with their worth tied up in investments and people with inconsistent income. Due to their leniency, they often accompany high interest rates and fees, low maximum loan options and limited features. However, if a standard personal loan is unattainable, it is a good option for personal finance.

P2P loans (peer to peer lending)

P2P loans match people with money to invest with people looking for a loan. A P2P lender operates an online platform and acts as an intermediary between the investor and the borrower. Many P2P loans are unsecured, with the risk to each party undisclosed. This means that there are high interest rates and fees as a borrower. There are often no credit checks, as the P2P operator assesses the applicant’s ability to repay the loan differently from platform to platform. 

Specialist loans

A specialist loan is a loan with wider credit criteria and special features that are outside of a traditional loan option. Again, as they are unlike traditional loans, there are often high interest rates accompanied by the loan. 

What to look for in a personal loan

Flexibility and transparency are two key things to look for when searching for a personal loan while self-employed. You may also wish to consider whether a loan with a fixed or variable interest rate is most suitable for you. There are four key things you should look for in a personal loan, whether self-employed or not:

  1. Low interest rates
  2. Fees (low or none)
  3. Short-term loans
  4. Good customer service

Increasing your approval chances

To ensure you are a strong applicant as a self-employed person, especially if you have a highly fluctuating income, you may wish to consider the following options:

  • Having collateral on your loan: Offering collateral on a loan minimises your lender’s financial risk which can increase your chances of approval. However, if you default on your loan, the lender may repossess your asset to recoup the cost of the loan.
  • Applying with a co-signer: Particularly if you have bad credit, having a co-signer on your loan adds a layer of security for the lender if you are unable to make your repayments. This co-signer is equally liable for your loan repayments.

Nifty Loans – Personal Loans

Nifty Loans offers short term financial assistance to Australians in need of credit. We are an online lender, making us flexible and fast. We offer quick loans for self-employed people from $300 to $10,000. We are also rated a 4.5/5 on Google reviews, which demonstrates our ability to meet the needs of our customers. We offer competitive rates and flexible repayments; you can make extra repayments and repay your loan early at no extra cost. We endeavour to deliver our outcomes within 60-minutes (if applied for within our business hours) and support instant transfers on approval.

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Andy Andy


Andrew Bell

Since founding Nifty in 2016, Bell has continued to make waves within the local financial sector for his continued ambition and willingness to adopt emerging technologies.

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