Loaning for self-employed workers is often not as easy as it can be for an employee or retiree. Self-employed workers face certain critical issues in the application process that the whole process could be long and fraught with obstacles (and it is not certain that it will eventually reach a positive conclusion).
Starting from this assumption, we are going to face, one by one, all the main problems and obstacles that may exist in the loan request phase by self-employed and freelancers.
Loans for self-employed workers: the lack of a paycheck
The main limitation linked to self-employed loans is, as mentioned above, the lack of a paycheck.
The self-employed category includes all those who do not have a subordinate contract: craftsmen, freelancers, entrepreneurs.
The documents necessary to apply for a loan include, in addition to all those relating to the natural person (identity card, residence permit in the case of loans for foreigners, tax code), also those that testify to income.
Specifically, we are talking about a tax return and any other document that can certify more or less periodic revenues (such as a rental contract, for example).
The bank and the finance company must necessarily comply with these documents in order to understand whether the person is really able to repay the amount lent.
Loans for self-employed workers for those who have had financial problems in the past
Financial problems happen to everyone, unfortunately. The main mistakes that can occur, from this point of view, are the entry in the register of protests or in that of bad payers.
Both choices lead, for the self-employed, to one consequence: the difficulty in applying for personal loans.
The fact that there have been these misunderstandings in the past leads banks and financial companies to have less trust in the person (from a financial point of view), therefore they could require greater guarantees or completely exclude the granting of financing.
Loans for Self-Employed Bad Payers
The entry in the register of bad payers takes place when all the loan installments requested in the past have not been paid on time. We talked about it in our guide to bad payers and bad payer loans.
This situation leads to the loss of self-reliance that, in the future, will be able to repay the loan if it has not succeeded in the past.
Consequently, it is necessary to prove that you have all the “credentials” to be successful.
The guarantor is often the first thing to consider. This is a third party who undertakes jointly and severally with the principal debtor to repay the periodic installments. The credit institution can legitimately request the guarantor to pay unpaid installments. He may then, by law, retaliate against the principal debtor, but that’s another story.
The second consideration to make is that sometimes you can think of opening loans with bills of exchange, even exchanged at home. In this case, the guarantee is given by the signing of the bills of exchange, which are executive securities that allow the bank to be able to easily recover the sums of money lent in the event that the debtor does not pay the installments.
Read all the information on loans to self-employed bad payers.
Loans for Protested Self-Employed
In the event that the self-employed person has had problems with unfulfilled bills or with unpaid checks and therefore has been reported in the register of protesters, it becomes really difficult to obtain funding.
The main problem is that some guarantees could be excluded a priori (such as bills of exchange, for example) and therefore need to “make do” with what remains.
It is often very difficult, not to say impossible, to be able to access this type of financing.
Read all the information on loans to protestors to self-employed and without paychecks.
Loans for Self-Employed: the Detail
Specifically, we can see that loans to self-employed people usually have amounts that range from 1,000 to 50,000 USD, depending on the bank or financial institution to which you apply, depending on your tax return and on the guarantees that can be provided.
The interest rate also varies in this case depending on the bank and the financial company.
Payment can be received by crediting your bank account or by check in your name.
The repayment is usually made through RID, even if any repayments of loans with postal bulletins cannot be excluded a priori.
Loans for Self-Employed: the purposes
There are no limits to what you can buy with self-financing, of course.
Being a non-finalized loan, it can be requested without having to provide some explanation, without giving any reason.
Among the various possibilities of using the sum of money obtained we see:
- auto loans and motorcycle loans
- travel and vacation loans
- wellness loans
- loans to buy a computer
- loans for buying school books
Loan application for self-employed refused, what alternatives are there?
From the moment you apply for a loan and it is rejected, there are some important considerations to make. We talked about it in detail on the text “loan refused what to do about the world of loans”, to which we refer you.
The main concept is that, after having had a refusal, the most wrong thing that can be done is to immediately ask a new question. The rejection of this new request is also 100% certain, because the first denial is entered in the credit bureau register, to which all banks and financial companies refer before deciding whether to grant a loan or not.
Therefore you might consider alternative ideas, such as a credit card or a private loan.
But it all depends on the reason behind the refusal.
If you are registered as a bad payer or, worse, as a protester, it is difficult to get a credit card, while it may be easier to apply for a loan between individuals successfully.
For any question, all you have to do is write us in the comments.