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Alex Ritchie

Updated on

04 May, 2024

Can you get a personal loan if you’re self-employed?

Taking out a personal loan typically requires a borrower to meet a set of lending criteria from the lender. But for self-employed Australians, it can be difficult to provide the traditional income verification documentation that lenders require.

This is where self-employed personal loans come in, making it possible for those who work for themselves and run their own business to gain loan approval.

What is a self-employed personal loan?

If you’re self-employed, you may find that you can gain loan approval through these avenues:

Low-doc personal loan – A ‘low documentation’ personal loan may allow self-employed borrowers to obtain finance without having traditional income verification documentation, such as a payslip from an employer.
Specialist loan – Some personal loan lenders specialise in providing personal loans for self-employed Australians. These lenders may require you to provide income verification in the form of past personal and business tax returns, ABN and GST registration information.
Secured or Unsecured personal loans – You may still qualify for a standard personal loan and opt for a secured or unsecured option, depending on your employment status and your income.

How do you get a self-employed personal loan?

For a standard personal loan, you will typically need to provide a payslip from an employer and other income verification documents to meet a lender’s eligibility criteria:

For self-employed Australians, this is understandably not possible. Instead, a specialist loan or low-doc personal loan may require the following documentation:

Proof of identification, such as a passport or driver’s licence
Your Australian Business Number (ABN)
Evidence you’ve been employed in the same industry for at least 12 months.

You may also need to include at least two financial years’ worth of:

Company tax returns
Personal tax returns
Past notice of assessment
Past business activity statements (BAS)
Past notice of assessment
P&L statement for the business
Balance sheet for your business (covering last 12 months)
Proof of ABN and GST registration for at least two years

How can you improve your chances of getting a self-employed personal loan?

Gaining personal loan approval is all about meeting the lending criteria set by a personal loan provider.

Outside of ticking the boxes listed above, there are a few steps you can take to potentially boost your chances of loan approval, including:

Improve your credit score – Lenders will always favour borrowers with excellent credit scores. As a borrower with excellent credit is perceived as less risky and less likely to default, the lender is more likely to approve the loan and offer you a lower interest rate. Consider grabbing a copy of your credit report and working to boost your credit score before you apply.
Industry experience – With a standard personal loan application, a lender may be more likely to approve an application when the borrower has been employed long enough to leave the company’s probation period (3-6 months). If you are self-employed, consider waiting until you’ve been employed within your industry for 24 months so you can not only tick the boxes listed above, but show that there is stability within your business.
Guarantor or co-sign – Another option that may increase your chances of loan approval is considering having someone (typically family or spouse) come on to the personal loan to support your application. This may be possible through applying for a guarantor personal loan or considering having someone cosign for a joint personal loan.

How long does it take to get a self-employed loan?

The time it takes to gain personal loan pre-approval or full approval can depend on several factors, including your personal financial situation and the lender you choose.

Generally speaking, filling in a loan application can take around 15 minutes, providing you’ve already gathered your relevant documentation ahead of time. Gaining loan approval, however, will depend on the lender you choose. Some lenders may provide approval and funds only hours after applying, while others may take several business days.

Step	About	Time taken
Research	Take time to compare the market and ensure you’re choosing the best personal loan for your financial goals and situation.	1 hour
Assess finances	Ensure your financial situation is in the most ideal position before you apply. This may involve boosting your credit score or paying off existing debts before you apply.	Several days/weeks
Documentation	Gather your relevant documentation ahead of time to make the application process as smooth as possible.	1-2 hours
Application	Fill in the personal loan application online or in a branch (if applicable).	15 minutes
Approval	Depending on your application, you may now gain loan approval and see the funds transferred into your account.	1 hour – 2-3 business days.

How do you compare self-employed personal loans?

There are several tools available from RateCity that may help you to find your ideal personal loan as a self-employed Australian, including

Comparison table

A personal loan comparison table allows you to create a personal loan short list and view loan options side by side. Simply search by loan amount and loan term and use the filters to find products that may be more suited to your needs.

Repayment Calculator

RateCity’s personal loan Repayment Calculator may show you an estimate of how much your personal loan repayments could cost based on the amount you’d like to borrow, your preferred loan term and interest rate. The repayment calculator can also provide you with an estimate of the total interest payable and total amount payable based on weekly, fortnightly, or monthly repayments.

Real Time Ratings™

Real Time Ratings™ is a world-first system that ranks personal loans in our database, based on your own individual requirements. Each personal loan is given a score out of five stars, based on loan costs and flexibility, in real time as you use the site.

Calculate your potential personal loan repayments

What are the alternatives to a self-employed loan?

If you’re still not sure whether a self-employed personal loan is the right fit for your goals and financial situation, it may be worth comparing your options.

Guarantor personal loan

As mentioned above, a guarantor personal loan is another option to consider when trying to boost your chances of loan approval. By having another person (typically family) guarantee your personal loan application, and even offer up security as collateral, a lender may be more likely to approve your application.

Buy now, pay later

Depending on the amount you’re looking to borrow, another option to consider may be using a buy now, pay later (BNPL) platform. Most BNPL providers offer access to credit up to $1000-$2000, with a set number of interest-free repayments then made on a fortnightly basis. Some providers may offer customers the ability to purchase items worth tens of thousands of dollars as well.

Home equity loan

A home equity loan involves you using the equity in a property as security to borrow money. If you’re a homeowner looking to access funds for a renovation, for example, this may allow you to use your home equity to inject value back into the property. The two main types of home equity loans are lump sum payments (similar to a personal loan) or a line of credit (similar to a credit card).

Alex Ritchie

Personal Finance Editor

Alex Ritchie is a Personal Finance Writer and Editor at RateCity, and has been writing about Australian finance for over six years. Her expertise and passion covers loans, credit, superannuation, and closing the gender pay gap, and she aims to help young Aussies to overcome their financial apathy. Alongside RateCity, Alex has been published in numerous publications, including Australia's Money Magazine, Business Insider, Lifehacker Australia, and in health via NPS MedicineWise.

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.

Frequently asked questions about self-employed personal loans

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, target market determination fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

Compare personal loans for self-employed borrowers

Find and compare self employed personal loans

On this page

Can you get a personal loan if you’re self-employed?

What is a self-employed personal loan?

How do you get a self-employed personal loan?

How can you improve your chances of getting a self-employed personal loan?

How long does it take to get a self-employed loan?

How do you compare self-employed personal loans?

Calculate your potential personal loan repayments

What are the alternatives to a self-employed loan?

Frequently asked questions about self-employed personal loans

Share this page

Did you find this page helpful?

On this page

Can you get a personal loan if you’re self-employed?

What is a self-employed personal loan?

How do you get a self-employed personal loan?

How can you improve your chances of getting a self-employed personal loan?

How long does it take to get a self-employed loan?

How do you compare self-employed personal loans?

Calculate your potential personal loan repayments

What are the alternatives to a self-employed loan?

Frequently asked questions about self-employed personal loans

Share this page

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