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Running your own business can be incredibly rewarding. However, if you’re self-employed and you require a personal loan, you may struggle to meet some of the eligibility requirements. Lenders often see self-employed individuals as more of a risk due to the fact that most small businesses (60%) fail within the first three years, according to the Australian Bureau of Statistics. Self-employed people may also struggle to prove their income or any assets that they may own, which can make it difficult to be approved.
However, there are options available from both traditional and non-traditional lenders offering personal loans to self-employed individuals. In fact, some lenders may approve your application in under 48 hours, so there’s no reason to feel pessimistic. The more you know about your options, how the process works and what documents you’ll need, the better your chances of a lender approving your application.
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Plenti offers this unsecured personal loan with a fixed or variable rate. Receive a tailored interest rate from 5.99% p.a. based on your risk profile.
A self-employed personal loan is a personal loan for people who are sole-traders or run their own business. While the application process is a bit different for self-employed personal loans, there are still plenty of options available to people who are self-employed. Typical options available to self-employed people include the following:
You will need to check the lending criteria of each to see if you qualify. If you're unsure about a lender's eligibility criteria, it's important that you contact that lender prior to submitting an application with any questions that you may have. There are also specialist brokers who may be able to assist you in preparing the right paperwork.
Keep in mind that for a standard personal loan, you'd usually need to provide at least two years of tax statements in order to qualify as a self-employed person. Depending on your lender, you may also be required to put up collateral as security for your loan.
Low doc loans can be a useful resource for self-employed people who may not otherwise be approved for a standard personal loan. This is because they require less documentation than traditional loans, which means a quicker and easier application process. So, if you struggle to prove your income or assets, you may find it easier to be approved for one of these loans.
However, the only reason you should apply for a low doc loan is if you can’t meet the documentation requirements set out by a standard personal loan. Low doc loans normally have higher rates and fees than standard loans, especially if you're dealing with a specialist lender. They also usually have fewer features and less flexibility than traditional loans. So, you don’t necessarily want to apply for one unless it’s your only option.
For self-employed applicants, lenders usually require any or all of the following documentation. Keep in mind that applying for a low doc loan may mean you won’t need some of these documents:
Lender | Interest rate | Loan amount | Available to self-employed? | What documents are needed? |
---|---|---|---|---|
ANZ | 12.99% p.a. | $5,000 to $50,000 | ![]() |
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Bankwest | 10.99% p.a. | $3,000 to $50,000 | ![]() |
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Bank of Melbourne | 12.99% p.a. | $2,000 to $50,000 | ![]() |
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BankSA | 12.99% p.a. | $2,000 to $50,000 | ![]() |
|
bcu | 8.94% p.a. | $5,000 to $75,000 | ![]() |
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Bendigo Bank | 12.79% p.a. | From $2,000 | ![]() | - |
Citibank | 20.49% p.a. | $5,000 to $75,000 | ![]() |
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Commonwealth Bank | 11.50% p.a. | $4,000 to $50,000 | ![]() |
|
CUA | 11.89% p.a. | $5,000 to $60,000 | ![]() | - |
Gateway Bank | 9.84% p.a. | $3,000 to $30,000 | ![]() |
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IMB | 9.54% p.a. | $2,000 to $30,000 | ![]() |
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Latitude Financial | 7.99% p.a. | $3,000 to $70,000 | ![]() |
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ME Bank | 10.98% p.a. | $5,000 to $50,000 | ![]() |
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MoneyMe | 6.25% p.a. | $2,100 to $50,000 | ![]() |
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NAB | 9.99% p.a. | $5,000 to $55,000 | ![]() |
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Plenti | 5.59% p.a. | $2,001 to $50,000 | ![]() |
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RACQ | 9.34% p.a. | $3,000 to $60,000 | ![]() |
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RACV | 6.49% p.a. | $5,000 to $30,000 | ![]() |
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SocietyOne | 6.99% p.a. | $5,000 to $50,000 | ![]() |
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St.George | 12.99% p.a. | $2,000 to $50,000 | ![]() |
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Westpac | 11.99% p.a. | $4,000 to $50,000 | ![]() |
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As mentioned earlier, low doc loans are usually more expensive than standard personal loans. This means that you should try to qualify for a standard personal loan before you look for a low doc loan.
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Keep in mind that many banks and alternative lenders may offer loans that aren’t more expensive than standard loans to self-employed individuals. Make sure you’re comparing all options and that you’re aware of exactly what’s out there before deciding to apply with any particular lender.
Keep in mind the following factors when comparing the loans offered by different lenders:
Interest rate | Make sure you know the difference between a fixed and variable interest rate. If you're going with a variable interest rate, check that you will be able to make monthly repayments if the rate happens to spike upwards at any time. |
Turnaround time | Depending on why you're applying for the loan, you may need your money disbursed within a certain timeframe. Make sure that any lender you choose can provide your money within the time period you need. |
Eligibility | Before applying for any loan, check what the eligibility requirements are. Also, avoid applying for too many loans within a short period of time as lenders will often consider you an irresponsible high-risk borrower if you make frequent applications. |
Application process | When comparing different lenders, be aware of the application process specific to each lender and what kinds of challenges or difficulties you may face when applying. |
Loan cost | Make sure you're aware of all fees associated with each loan. This includes any one-off or ongoing fees. |
Secured vs unsecured | Always check to see if the loan you're considering is secured or unsecured. In other words, check whether the lender requires you to put up any collateral as security for the loan. Security could include assets such as your home or business equity. |
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I need a loans required for business growth and development. Can I help you.
Hi Rupesh,
Thank you for contacting finder. We are a comparison website and general information service, we’re more than happy to offer general advice.
You may refer to this page for options that may suit your needs, as well as articles that you may find useful.
I hope this helps.
Cheers,
Danielle