Unexpected financial emergencies may sometimes require you to borrow fast cash. However, finding financing options for self-employed borrowers can be difficult. Luckily, many lenders may be willing to offer self-employed payday loans for applicants who don’t fit into the traditional cookie-cutter bank requirements.
Bad Credit Payday Loans for Self Employed
Banks use not-so-complicated risk assessment models to determine creditworthiness. They basically look at your credit score and credit history, and if the number is high enough and the history deep enough, then you will receive your funding. Those with low credit scores or no credit history find it hard to get quick cash when going through a bank or credit union. There are a couple of other red flags that banks watch out for. Being self-employed can be a non-starter when working with a traditional lender.
How will the bank know that you are self-employed? When filling out a loan application, individuals provide this information with essential tax documents, like a W-2. If you’re self-employed, this information will show up in your tax documentation. While this may make it more difficult to find funding from some providers, there are alternative lending options out there that regularly work with the self-employed.
No Credit Check Payday Loans for Self Employed
Those with bad credit may have a harder time finding a loan. Unfortunately, “no credit check loans” are not an option, as lenders will always check an applicant’s credit score. That said, those with bad credit might be able to find funding through an alternative funding source.
One form of alternative lending is self-employed payday loans. This product is a short-term loan that you are usually expected to pay back on your next pay date. Lenders will want to know that you have been receiving consistent payments for the past few months, and it should not matter if those payments came through your own company. It will be to your benefit if these payments are relative to one another concerning their size. This shows the lender consistency in your earnings.
Talk with the lender you have chosen to work out the fine details of the application process. It’s recommended that you work with a reputable lender when making a final decision regarding your loan. Shopping around could give you some room for negotiations, which can yield greater loan limits and more lenient payment timetables.
Standard Requirements for Self-Employed Payday Loans
Regardless of your lender, you will need to provide a signature. With physical lenders, the process will be as simple as signing the appropriate documents. If you opt to work with an online lender, the process will be slightly more complex. Since you can’t provide a conventional signature, you may need to provide an e-signature. Creating an e-signature payday loans today Mississippi is as simple as typing your name into the appropriate box on your lender’s webpage. It’s just as binding as a standard signature. Your lender will record your computer’s IP address and hardware ID. Doing so gives the e-signature just as much validity as a standard one.
Next is proof of employment. If you work as an online freelancer, providing invoices and payment confirmations from your clients may be a suitable replacement for a W-2 under most circumstances. Typically, PayPal receipts are also acceptable. Check with your lender to ensure that either of these sets of documents is suitable.
If you lack these documents, your application process will be significantly more difficult. Qualifying won’t be impossible, however. If you speak with your lender about your issues, you may find they are willing to work with you in finding an amicable alternative to these documents that can verify that you are receiving a steady income. While their willingness to negotiate will likely hinge on how much you’re claiming to earn, it’s still worth trying if you don’t have many options available.
Self-Employment is On the Rise
Recent advances in smart technology and all-online services has led to self-employment becoming far more common than it was in previous years. Because of this, lenders are now more open to working with self-employed individuals.
We touched on it earlier, but if there is a large discrepancy between each of your paychecks, lenders may view your income as inconsistent. Consistency is important when determining your eligibility, so if your earnings are wildly inconsistent, it may present a considerable hurdle in your application process.
As a result, it’s to your benefit to have a few months of consistent earnings in place before you begin applying for a self-employed payday loan. Having this history of earnings will be especially useful if you’re looking for a larger loan greater than $500.
Your Checking Account
Without a checking or bank account, loan lenders will not be able to withdraw your payments automatically. Without a checking account, you should expect to jump through a lot of hoops to stand a chance at being approved for a loan.
Direct deposit is the most common method lenders use to deliver funds. It’s fast, usually available within as little as one business day, and lenders are confident in their legitimacy since a large bank is working as a middleman.
Using Your Credit Card Instead
You may be able to opt for cash or a cash advance using your credit card. Sometimes card issuers attach high fees to cash payouts. You may want to consult with your issuer to see if this is the case. A cash advance is a very simple process. This option is available to those who have a credit card with this functionality. You can borrow from the card using an ATM and then pay the money back through your regular monthly bill. You should know that some borrowers discover that this method is more expensive than short-term lending, as the initial fees for borrowing cash through your credit card is high, and then there is the added interest you will owe depending on how long it takes you to pay off the debt.
If you need to make an emergency payment and you are a self-employed worker, you may consider using payday loans to supplement your income. They can be an effective and straightforward way to improve your quality of life if spent wisely.