SELF EMPLOYED LOAN ACESSIBILITY

2007-03-08 10:33:40

( Health )



Self employed individuals usually find it difficult to access loan particularly when they cannot guarantee proof of regular income. Sole proprietors, business partners, independent contractors and consultants are considered to be self employed.

Accessibility of Self Employed Loan

Access to self employed loan relies heavily on your ability to provide certified account or proof of income that employed people can easily provide. Also, it matters when you are applying for a secured or unsecured loan. You must provide for a security such as your house when you apply for a secured loan. Both loans will rely heavily on your regular income generation to establish your ability to pay off your loan amortization.

Self employed loan has become more accessible in the recent years given the increasing number of individuals going towards self employment by putting up businesses or going on consultancy work. Also, it has become more affordable compared from many years back. However, self employed loan will be at a higher cost if you have adverse credit history.

How Lenders Asses

Lenders will assess your market value in your field to determine if you will have enough contracts or business generation during the duration of your self employed loan. They will specifically determine the length of your experience in your field or business to determine your ability for sustainability and thereby your future earnings.

Another factor that lenders will take note is the number of contracts you already had if you are a consultant doing free lance work in a certain field. This will determine your ability of being hired back by the company that you are rendering service. Also, it will tell the lenders that your services are in demand in your area of expertise.

Start-up Businessmen

Start-up businessmen who are in their respective businesses for less than a year will encounter longer process of evaluation and sometimes are told to wait until their businesses are well established for lenders to consider them for self employed loans.

Self employed loans, particularly mortgages self employed, are neither difficult nor expensive to access as long as you have the necessary requirement of longevity in the business you are in and sustainability in your operations. You must be able to prove these two aspects to the lenders to be given the chance to avail of self employed loan.


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