A personal loan for self-employed individuals, freelancers, entrepreneurs, sole proprietors, and anyone else that does not have a standard employment arrangement can be very difficult to obtain.
In fact, this is true whether you’re looking for a personal loan in India, the United States, or anywhere in between. Unfortunately, finding banks that understand your situation and offer reasonable borrowing terms is challenging.
In this article, we’re going to discuss your options, share the hurdles you need to overcome and give you suggestions on how to obtain the personal loan you need.
This is part of our free series on banking in the United States, ranging from how to create a US PayPal account to accessing overseas mortgages.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Personal Loan for Self-Employed
- What Is the Eligibility for a Personal Loan for a Self-Employed Person?
- How Do I Apply for a Personal Loan as a Self-Employed Person?
- Frequently Asked Questions
- Ready to Open Accounts With Banks in the USA?
Personal Loan for Self-Employed
A personal loan for self-employed individuals refers to a flexible financing arrangement that can be accessed by business owners, entrepreneurs, freelancers, sole proprietors, contractors, and self-employed professionals.
The specific terms of a personal loan will vary depending on the specific financial institution offering the loan. However, in most cases, there are a number of self-employed loan options that individuals can consider.
For example, there are unsecured personal loans and secured personal loans. Likewise, there is no proof of income loans and income tax return loans. And, there are business loans or peer-to-peer loans.
In all cases, it’s important to review all of the available options since the terms can vary widely between banks.
Individuals who are interested in the types of certificates of deposits, specifically a no-penalty CD, can click this link to learn more about how CDs compare to other available options.
What Is the Eligibility for a Personal Loan for a Self-Employed Person?
The eligibility for a personal loan for self-employed individuals is going to depend on the specific financial institution that you are considering, the size of the loan you want to borrow, and the available supporting documents that you have for your self-employed status.
With this in mind, here is a look at some of the most important criteria for a personal loan.
Personal Loan Eligibility Criteria for Self-Employed Individuals
- Acceptable credit score
- Supporting financials
- Demonstrate consistent income
- Reduce total credit utility
How Do I Apply for a Personal Loan as a Self-Employed Person?
To apply for a personal loan as a self-employed individual, you can contact your bank directly and ask for the available terms based on your income, current debt, loan requirements, and more.
Do You Want More USA Banking Insights?
Sign up here to receive our Free USA Banking Starter Guide. It’s designed to help non-residents with opening bank accounts at top financial institutions in the US.
Frequently Asked Questions
Below are four of the most common questions we receive from people looking into this topic. If you have further questions you would like to ask our team, don’t hesitate to get in touch.
Why Should I Take a Personal Loan for the Self-Employed?
If you are self-employed, you may want to take out a loan. Naturally, you consider loans for self-employed individuals because they are typically more flexible in terms of source of income, income fluctuations, supporting financial documents, and more. This means they are more capable of onboarding self-employed individuals, who traditionally struggle with these factors when it comes to securing financing through traditional financial institutions.
How Can I Get a Personal Loan If I am Self-Employed?
If you are self-employed, you can get a personal loan from most financial institutions. However, the amount available to you and the terms offered will vary. With this in mind, in order to get the best possible terms, you should compare all available lenders, ensure you have a strong credit score, reduce your credit utility score by paying down outstanding debt, and be able to demonstrate consistent income.
What Is the Minimum Income for Personal Loan for the Self-Employed?
The minimum income for a personal loan is going to vary by country, state, type of financial institution (or borrower) you approach, and more. Not surprisingly, if you are looking to borrow a personal loan from an informal lender in the unorganized financial sector, like a pawnshop or same-day money provider, you will pay significantly higher rates.
Who Is Eligible for ITR Loan?
Who is eligible for an ITR loan will ultimately depend on the specific country where this option is being explored. However, in general, an Income Tax Return (ITR) loan is available to self-employed individuals and those individuals with non-salaried income generation. This includes freelancers, contract workers, business owners, individuals that primarily earn income through commission, and others.
Ready to Open Accounts With Banks in the USA?
If so, you can get access to GlobalBanks USA (our dedicated US banking service) in just a few clicks.
GlobalBanks USA is a 100% personal account opening solution. It provides direct access to our team of US banking experts.
When you join, you receive…
+ Expert suggestions on where to open US bank accounts.
+ Step-by-step support to navigate opening US bank accounts.
+ Direct introductions to helpful and responsive bankers.
+ Plus, detailed guides to maximizing the value you get from your new US bank account.
And “yes!” GlobalBanks USA helps foreigners and non-resident individuals open bank accounts.
In fact, GlobalBanks USA even helps non-resident US LLCs and foreign & offshore entities.
To learn more about GlobalBanks USA, visit the product page to see how our team can help you successfully open US bank accounts!
