Getting a loan for starting your own business, expanding the office space or for necessary machinery is generally not a problem for self-employed and freelancers with sufficient income and a perfect Credit Bureau file – there are special banks that provide loans for operating resources or provide company foundations.
However, if a self-employed person or a freelancer wants to borrow money from a bank in order to be able to buy a private purchase, such as a new vehicle or new furniture, or to be able to pay a due invoice, the banks are generally not particularly cooperative: consumers, that are not in permanent and permanent employment pose a risk to financial institutions and are therefore often not particularly interesting as customers – some banks even categorically exclude the granting of installment loans to this target group.
Special direct banks grant loans to the self-employed
Since these self-employed and freelance consumers do not have a secure and regular income, the repayment of a possible loan is associated with a high degree of uncertainty for the bank. If the bank grants a loan to the self-employed despite the greater risk, they usually have to pay high interest on the borrowed money.
But even for the self-employed and freelancers, it is not hopeless to get a loan from the bank in order to be able to bridge a private, financial bottleneck. Using a free online loan comparison, it is easy to find the banks, grant the loans to the self-employed and at the same time compare the different conditions of the financial institutions.
If the self-employed consumer can offer the bank security other than their own income, many institutions can be persuaded to lend to these consumers. As a possible loan security against loan default, the bank’s self-employed and freelancers can offer mortgage lending, life insurance or other savings, for example.
A second borrower increases the probability of accepting a self-employed loan
Another way to convince the bank to grant a loan to a self-employed person is to apply for the loan together with a second, permanent consumer. If the loan is taken out jointly, both consumers are liable in the event of a possible loan default – if the loan is not repaid as agreed, the bank has the option of seizing the income of both borrowers in order to settle the outstanding debt. This not only increases the likelihood of a loan – the terms of the loan also decrease significantly as a result of the second applicant.