Loans for self employed
If you are self-employed, you may find that it is difficult to get a loan. Since many self-employed workers have inconsistent incomes, lenders often make it much more complicated to get a loan, if they do decide to give you one at all.
In many cases, it can be tough to get a good interest rate or favorable repayment terms if you are self-employed. Often times, lenders feel that a self-employed income isn’t steady enough for them to lend you money. In addition, some lenders see self-employed workers as riskier investments.
So what loan options exist for someone who is self-employed?
The good news is that there are a few great loan options available for self-employed workers.
Borrow Against Your Car
If you own a vehicle, you can get a vehicle title loan. A vehicle title loan is a loan that uses a paid off vehicle as collateral or security. Since a vehicle title loan is secured by your vehicle, you are usually eligible for a larger loan with a lower interest rate. In addition, vehicle title loans can often be paid back over a longer period of time.
If you get a vehicle title loan, don’t worry, you’ll still have full use of your car as long as the payments are made.
Vehicle title loans are often a good option for those who are self-employed as they generally allow you to get a lower interest rate, a larger loan and a longer period to pay back your loan.
You can find more information about vehicle title loans here.
In order to get more favorable rates on a home loan, a self-employed person will typically be required to fill out a great deal of paperwork and documentation. Even after doing so, you may still be considered riskier by lenders and receive additional hassle or less favorable borrowing terms.
However, you can improve the likelihood of you getting a home loan in a number of ways including:
- Getting a joint mortgage with a co-borrower
- Having someone co-sign your loan
- Having a good credit score
- Offering a larger down payment
- Paying off consumer debt
- Having an established record of self-employment income
By having a history of borrowing and successfully paying off loans, you can build credit and show lenders that you have the ability and the income needed to pay back a loan. This can help you in the future if you are trying to secure a larger loan.
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