There are a number of people who like
challenges and are driven by innovative ideas. These people
have the will to prove their mantle before the world. And
self employed or in other words entrepreneurs form a big chunk
of this group. And to help them to achieve what they believe
there are self employed personal loans in offering. Gone are
the days when securing a personal loan by the self employed
used to be a big challenge in itself. With the growing figures
of entrepreneurs in U.K. now a number of financial organizations
have come ahead to help them grow their enterprises, making
these loans available with a lot of ease and flexibility.
These personal loans can be used for numerous purposes.
Some facts regarding self employed personal loans:
- Can be of both natures secured as well unsecured.
- Secured loans ask for some collateral and have lower
interest rate with them. The amount that can be borrowed
is also higher.
- Unsecured loans relieve you from risks of loosing your
collateral but they have a bit higher interest rate.
Self employed personal loans: flexible repayments
One of the best parts of self employed personal loan is the
flexible repayment terms. There are basically four parts of
repayment modes namely, down payment; under payment; overpayment;
and payment holiday. Now it is a well known fact that self
employed have a variable income. So, to suit their needs these
repayment modes are designed specially for them. They need
to make some down payment as there are always chances for
the failure of the business. This down payment can be anything
around 20%-40% depending upon the credit history of the borrower.
Then comes the concepts of underpayment; over payment; and
payment holiday. If the income in a particular month is less
then one can use the option of underpayment, in case of extremely
low income one can go for payment holiday when repayment installment
is not compulsory, in case the income is good then to reduce
the interest amount overpayment is an extremely good option.
Requirements of self employed personal loan
For secured loan some collateral is required and the benefit
you get is the lower interest rate and higher borrowing amount.
In case of unsecured loans you have to generate documents
regarding your income tax returns for last three years, a
good credit history for around past three years. Also the
interest rate is a bit higher in comparison with the secured
loans. One of the factors that can go against obtaining unsecured
loan is that self employed generally don’t furnish correct
record of their income while filling their returns. This can
bring down the amount that can be borrowed.
An encouraging part is that your bad credit record can’t
prevent you from obtaining loan. The amount that can be borrowed
ranges well between £25000- £75000. And then the
repayment term is between 3-25 years.
So, go by these words “where there is will there is
a way”. Loan for self employed is one of the success
routes for all those who have strong self belief, willpower
and an urge to be their own boss, or to be leader.
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