A Guide for Self-Employed Workers to Find the Perfect Loan

December 23, 2020
signing documents

Looking for funds can be extremely difficult, especially if you’re self-employed. That being said, taking out a loan isn’t impossible. Why is it so hard, you ask? Banking companies require applicants to submit all types of documents and requirements that can be hard to reach. Fortunately, with Hoopla Loan’s help, you won’t have to worry! There are financial institutions that can give you access to the lending program that is best suited to your needs. Before that, however, you’ll need to be eligible. You’ll also have to gather all the required documents and familiarize yourself with the application process. Here are two questions that self-employed people usually ask:

1 – How do I take out a personal loan if I am self-employed?

As an independent worker, you have three methods of obtaining a loan. The bottom line is that you have to prove to the bank that you’re employed and have the ability to pay the money back. If you can do this, you can choose the standard lending program. Alternatively, you look to take out a loan specifically designed for those who are self-employed. Your last option is to ask for a low document loan, which is one with fewer requirements and less documentation. Remember— every loan has its interest rates and financing periods. Choose the one that is most attractive to you.

2 – Do self-employed people have to pay more for loans compared to others?

If you’re getting a low document loan, expect that you may be paying a little more. This isn’t discrimination, though— low document loans are generally more expensive than standard loans. The reason why low document loans cost more is that they offer more support but require fewer documents. However, they also come with high-interest rates that you have to pay at the end of each month. Thus, it makes more sense to apply for the standard loan. Again, before you choose, be mindful of the differences between each type. Pay attention to documentations, applications, interest rates, and everything else before you select the best one.

Let’s take a look at an example of a personal loan appropriate for self-employed workers:

Personal loans for self-employed workers

Anyone, including the self-employed, should be able to take out a personal loan. Loans range from R500 to over R200,000 and typically allow you to choose any capital. Those taking out loans choose terms of up to 6 years. If you aren’t taking out too much and have the ability to pay it back quickly, however, you can choose to pay it off in as little as 3 months. An advantage of this loan is that you can pay in installments. The installments are fixed and can even be reduced to help you save money. 

Before you take out a personal loan, consider the financial institution you are taking it out from. Good financial institutions will also provide customer service, so you can contact them at any time if needed. The best ones offer you a variety of ways to get in touch, whether it is in person, through the phone, or via an online platform.

How you can apply

When you apply for a personal loan, you will have to complete an application form, typically available on the lending institution’s website. You can also visit their brick-and-mortar establishment. You will then need to prepare all the documents that the bank requires. Generally, those documents are your ID card or any other means to show your personal data, proof of your place of stay, and any recent bills. These documents must be up-to-date. You cannot present your older ones.

After careful preparation and hopefully minimal stress, there you have it! You, a self-employed worker, can now get loans hassle-free. Make sure to manage your debt well to keep your credit and reputation up!