If any person individually operating a business or practicing any particular profession or is only a sole trader, an independent contractor or an independent consultant, then they are deemed as self employed. A self employed individual has his own set of problems and getting self employed loan is not so easy. In UK the lending companies provide secured self employed loans.
Self employed individuals face difficulties for showing the proof of their income. Hence, a self employed borrower can place a security as a guarantee to qualify for this type of loan. The security deposit is the primary requirement of secured self employed loans. The security can be in the form of real estate which has be the borrowers’ home, stock and bonds, car or any other identifiable asset. If the borrower is unable to repay the loan amount, the lender can use the security to pay for the loan. The self employed individual seeking this loan should also have a bank account which must be at least 3 years old and good credit history.
The loan amount can vary from £25,000 to £75,000. The loan amount can increase up to 125% depending on the security placed at the time of approval. The repayment tenure of secured self employed loans varies from 5 to 25 years. The rate of interest is lower in these loans then the other regular loan types for self employed borrower because of security deposit. The repayment terms are easy and flexible making monthly repayments easier and not a burden on the self employed individual. These loans are also flexible with bad credit self employed people where the lender secures the loan with a down payment of 20% to 40% of the loan amount. The application process requires no paperwork for self employed borrower and is easy and hassle free.
Summary
Secured self employed loans are for those people who work individually and are willing to pledge any security with the loan lender. Depending on the deposit the loan amount can increase up to 125% of the loan amount. Hassel free application, no paper work, fast processing, flexible repayment terms and conditions are the advantages of such loans. So, self employed people can solve their financial crisis with the help of these loans.
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