Compare personal loans for self-employed borrowers

Personal loans for small business owners, tradies, freelancers, contractors and other self-employed Australians - Data last updated on 24 Apr 2019

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Compare self employed personal loans

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What is a self-employed loan?

A self-employed loan is a personal loan designed for people who own their own business or are self-employed.

Who offers self-employed loans?

A wide range of lenders offer self-employed loans. Some lenders have specific requirements surrounding employment and documentation, so it’s best to check your eligibility before applying, because if you get refused a loan, it can negatively impact your credit score.

An easy way to see whether you might be eligible for a loan is to visit RateCity's personal loan marketplace, which can tell you your chance of being approved for a loan, based on your personal criteria.

Self-employed loans

How do you compare self-employed loans?

To compare self-employed loans, you should consider the interest rate, fees, repayment schedule, and your own specific needs. Loans for self employed people can range greatly in their features and interest rates, so it’s best to compare several loans to find the one that fits within your budget.

How can you improve your chances of being approved for a self-employed loan?

Getting a loan while self employed can be a challenge. One way to improve your chances of being approved for a self-employed loan is to gather as much documentation as you can. This documentation may include tax returns, financial statements, proof of income, and recent bank statements. The more documentation you can gather, the better a lender can understand your financial situation.

How do you take out a self-employed loan?

Many self-employed loan lenders supply a simple online application process. Applicants must complete the online form and provide any required documentation before submitting. The lender then reviews the application and either approves or denies the loan.

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

The time it takes to receive your self-employed loan varies depending on the lender you choose. While some lenders deposit your money within 48 hours, others take a few days to pay out their loans. 

personal loans for self employed

What are the pros and cons of self-employed loans? 

Like all borrowing options, self-employed loans have both positives and negatives. Of course, the positives are that they give you the funds you need to grow your business or cover expenses, and have a relatively easy application process.

One of the negatives of self-employed loans is that they often require documentation that can be challenging for self-employed people. Acquiring a personal loan self employed with no proof of income or other financial documents is challenging, and may require research to find a lender that works with your specific situation.

What are the alternatives to self-employed loans? 

Alternatives to self-employed loans include low-interest credit cards and guarantor personal loans, which allows a family member or friend to act as a guarantor. Essentially, a trusted family member or friend can co-sign the loan and agree to accept responsibility for the repayments if you default. This guarantee may help you secure a personal loan with a reputable lender.

CASE STUDY: Chris gets a guarantor

Chris owns his own business and was struggling to find a lender that would approve a personal loan based on the documentation he had. After his first application is denied, Chris asked his brother to act as a guarantor for a personal loan. Because his brother agreed to accept responsibility for the repayments should Chris default, a reputable lender was able to approve his personal loan.

FAQs

It may be much more difficult for a self-employed borrower to successfully apply for a personal loan if they also have bad credit. Many lenders already consider self-employed borrowers to be riskier than those in full time employment, so several self-employed personal loans require borrowers to have excellent credit.

If you’re a self-employed borrower with a bad credit history, there may still be personal loan options available to you, such as securing your personal loan against a vehicle of equity in a property, though your interest rates may be higher than those of other borrowers. Consider contacting a lender before applying to discuss your options.

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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, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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