Self-employed people can sometimes find it difficult to obtain a small loan. There will be various hoops to jump through to prove that you can afford the loan and everything can seem a lot more complicated and take more time than you anticipated.
So why is this the case? It’s part of the general trend by lenders in recent years to tighten up their lending criteria. For both mortgages and unsecured loans there are more stringent checks required on the affordability of the loan and the ability of the individual to repay.
So whilst in the past some lenders were satisfied with self employed people verifying their own income, now they will want to see detailed financial records to validate your income and satisfy them that you are able to afford the loan. You should therefore expect to answer questions about your financial commitments and spending habits, and also provide detailed accounts of your earnings.
We would recommend that you are honest with yourself about the likelihood of you obtaining a small unsecured loan before applying for one because if you apply and are rejected then the details will be visible on your credit file, which could then have an adverse effect on your ability to obtain further finance.
Some choices to contemplate
If you are confident that you will be accepted for a small unsecured loan then make sure you consider a range of lenders authorised by the Financial Conduct Authority and that you prepare all the information that you will need for the application process.
When researching lenders cast your net wide and look beyond just the mainstream lenders. Find those financial organisations that will look at the bigger picture, especially if you have had credit issues in the past. Always check that your preferred lender is regulated by the Financial Conduct Authority as they are obligated to abide by rules and regulations introduced to protect the interest of consumers.
How Loans 2 Go could help
At Loans 2 Go we meet all the above criteria! We do not make lending decisions on rigid algorithms but will always treat each case on its merit and will not count the fact that you are self-employed against you. As a responsible lender we will not encourage you to get into more debt if this is not affordable but will find ways to help you raise a small unsecured loan if we are able.
This article do not constitute financial advice and are provided for general information purposes only. No warranty, whether express or implied is given in relation to this article therefore we cannot be held liable for any technical, editorial or other errors or omissions within the information provided on this website.