The world is full of people who dare to make their dreams come true by treading a path less traveled or sometimes ignored by the majority because no one wants to get out of the comfort zone. . . The path is of self employment or in other words entrepreneurship. It is a strong desire to leave one’s presence felt in the business arena of the world that drives people to opt for starting a business of their own.
They require money for their personal or business needs and this is where they find personal loans for self employed handy. Statistics suggest there are at present 2.75 millions U. K residents who fall in the category of being self employed. It is this exponentially growing number of entrepreneurs that has lead lenders, financial institutions and banking enterprises to design loans which specially cater to various requirements of these people. personal loans for self employed is one of such loans which helps people wishing to start a feasible business, or expand the same or to fulfill their personal desires like going for a vacation, buying a luxury car or renovating home.
Personal Loans for Self Employed: Some Facts
Traditionally these loans were difficult to obtain as the lenders were apprehensive about the repayment but with the growing numbers of people preferring to start an enterprise of there own and being their own boss and a sound economy being the other reason lenders are flocking to provide these loans . thus flexibility is a natural process.
Personal loans for self employed differ from other conventional loans in some respect but the common thing is their usage. However a consistent effort is being employed to give this loan a certain degree of distinctness. A common feature is the repayment which is designed specially for entrepreneurs. Let us delve into it…. it is a common notion that the income of self employed persons is variable and depends on so many constraints. So there comes the concept of down payment, underpayment, overpayment and payment holiday.
Down payment is just a tool to negate fear among the lenders about the failure of business. In this case the borrower is asked to pay 20 to 40 % of the loan amount and this depends on the credit history of the borrower. As self employed persons do not have a fixed income and it can go high or low so when you have a lesser profit you can pay a lesser amount of money for that particular installment period, this is what the idea the underpayment stands for. by overpayment you can return a higher amount when your profit is more. And you can also opt for not paying the installments for some duration using the payment holiday options.
Personal Loans for Self Employed: Amount and Requirements
You can opt for secured or unsecured loans. For obtaining secured loans you have to provide some valuable asset like home as collateral. the interest rate for secured loans are lower as you are offering a security for the loan amount . if you don’t wan to submit anything as collateral you can opt for unsecured loans. In this case you may have to furnish documents of your income like the tax statements of the company, three years of general T1 tax returns and three years of personal notices of assessments. Some lenders will approve loans by a simple letter from your accountant.
The loan amount generally shuffles somewhere between £ 25000-£75000. and the repayment period is 3-25 years.
Christian Phelps is a Masters in Accounting and Financial Management from Lancaster University Management School. He has been working with loan for self employed since his academics got over. To find Self employed secured loan, unsecured self employed loan visit http://www.loanforselfemployed.co.uk