Going to a bank in order to get a loan is never a simple process. There is a lot of bureaucracy involved and in most cases, you will be required to go to several appointments to prove that you are eligible for the bank’s services.
Even after all of this, some banks may simply decide that your credit score is not high enough or that you have to submit additional documentation to get the loan. Some banks may also set certain limitations when it comes to what you can do with the money that they lend you.
Generally speaking, the process can take a very long time, which is bad news if you need money today. Luckily, there is always the option of using an online service to get a loan. These process loan requests in under 24 hours and usually transfer the money in a few minutes after you’ve been approved.
This having been said, there are hundreds of different online money lending services, each with their own terms and conditions. If you want to get a good deal and not be surprised by how much you have to pay back at the end of the term, you will have to learn how to find a reliable platform.
Research online lending platforms that you can use
The first step when it comes to borrowing money online is researching your options. Look at what platforms operate in your area. Some states prohibit their activity while others simply regulate them so that they offer as much financial transparency as possible.
Depending on how fast you need the money, you may want to look for a same-day lender. These websites process the loan requests extremely fast and also sent you the money almost instantly. In some cases, it can take as little as 2-3 hours for the money to be deposited into your account.
Look at what options you have and then go to a third-party review platform such as TrustPilot and read what previous users had to say about the platforms. Once you find one that has a good score and great reviews, you’re good to go.
Get all of your documents together
The next step is to find all the documents that you will need. Almost all services will require the following:
- Proof of identity – This can either be your government-issued ID, a passport, or even your driver’s license. You will have to take a photo of one of these documents using your phone and upload it to the platform;
- Proof of address – You can use a rental contract, a recent utility bill that has your name on it, or any other document that clearly states the fact that you are living where you claim;
- Proof of income – This depends on the platform that you use. Some will ask that you submit a pay stub, while others may ask you for a copy of last year’s federal tax income, or a tax statement. Keep at least one of these nearby;
Keep in mind that some platforms may also ask for your credit score, however, this information is only needed for marketing purposes. The score will not be checked and it will not have an impact on whether you get the loan or not.
Do the math and compare the rates and fees
Each service offers different rates and fees for its services. Look at what amount of money you need to borrow and find the platform that offers the biggest advantages. In most cases, short-term loans will have considerably lower rates than ones that last for several months.
Find 5-6 platforms that you would be willing to use, write down what rates each of them offers and do the math to see how much you will have to pay back. Find the one that has the lowest rates for the period of time that you are interested.
Apply for a loan using the website or the app
You can apply for the loan using the website, however, some platforms also offer smartphone apps that help streamline the process. These can make it easier to send in the photographed documents and also to keep an eye on what amount of money you’ve borrowed and how much you need to pay back.
The simplest way to get a loan instantly is by using an online service. These are regulated by the government, so your personal and financial information will be safe. Furthermore, if you know what to look for, you may get a better deal than what a bank would offer.
Pay close attention to what platform you use, make sure that you understand all the terms and conditions before applying for a loan and you won’t have anything to worry about....
When a person takes a loan, the usual documents he must present are his proof of in, income tax return, employment certificate, and bank statement. Lenders would want to assess his capacity to pay the monthly dues along with interest. Extending a loan to someone who has no regular income can be a risk.
So, does this mean that the self-employed cannot get a loan from banks and other financing companies? The answer is “no.” A person that works for himself earns an income by practicing their profession or trade or in other occupations.
The whole process can be challenging, but there are many ways that someone who has no employer can get approval for a loan. Here are some of the credits for the self-employed.
Types of Loans for the Self-
Several lenders welcome self-employed applicants for payoff loans, SoFi, and Upgrade. Payoff loans offer consolidation of all debts from several credit cards so that you will enjoy a fixed monthly payment. The lender will ask you to submit your tax return and Schedule C, a tax form where you indicate your income and profits, to assess your earnings and capacity to pay.
You also have to submit a bank statement as well as a bank account where you deposit your earnings. The creditors will release up to $35,000 to pay off all your credit card balances. Paying one creditor is better than worrying about multiple dues every month.
Another loan that self-employed people can enjoy is the SoFi loan. With a maximum loan offer of 100,000, which the company will release on several installments, you can use the funds to pay for the consolidation of your debts, house improvement, hospitalization, and relocating.
To qualify, you must show your credit score, your education, expenses, and income to make sure that you can pay the amount you borrowed on time. Having a co-signer can increase your chances of getting loan approval. A co-signer is a person that would pay for the loan if ever the borrower fails.
If you want to take an unsecured personal loan to buy appliances, pay for medical bills, or pay old debts, Upgrade online lending offers up to $50,000 to self-employed borrowers. To apply, have a copy of your tax return and your Schedule C. You may also need transcripts from the IRS as well as a bank statement or statements in the last 40 days.
Other Personal Loan Options
Self-employed borrowers can explore other options aside from using the services of online lenders. Here are different ways to borrow money for your needs.
Do you own jewelry and expensive gadgets? Nowadays, some pawnshops would accept high-end mobile phones, cameras, and branded accessories such as bags and sunglasses. Pawnshops do not ask questions or require any documents. You can ask for an assessment of your property, how much they would lend you for the item, and if you agree to the loan price, you can sign a receipt and take home the money.
A customer that cannot pay back the loan on the maturity date of the credit must pay interest and penalties. The shop will give a grace period of three months after the maturity date. Items used as security for the loan become the property of the lender, and he can sell them to cover for the amount that you borrow.
- Home Equity Loan
Self-employed people that own real property can apply for a home equity loan. For this type of loan, you borrow against the value of your home when taxes, credit balances, and other payables due.
A person must have 20% equity on his home before he can use it to secure a loan. A house that costs $300,000 will require you to pay at least $60,000 to earn 20% equity. You can only borrow against it if your capital is around 30% or more. You might also have at least a credit score of 620, recent tax reforms, and a record of your income.
- Credit Cards
Another way that you can get a loan if you are self-employed is through a credit card. Anyone that is of legal age and has an income can apply for a credit card. You can use it to purchase items or to get a cash advance in which you withdraw from an ATM using the credit card. However, interest for cash advances is higher than using it to purchase goods.
Making prompt credit card payments can improve your credit score, which will later allow you to take loans from banks and other lending companies.
You may also seek help from your family and friends. If they can lend you money, you can save on interest. Some of them might only ask you to return the money when you can. You can enjoy the most flexible payment term as well....