Self Employed Loans- Ideal source of finance for self-employed
Written by: Amanda Thompson
Making a mark for oneself in the competitive world of business
is tough. Especially for people in UK who are self employed and
don't have access to that extra sum of money that can make the
task easier. But, where can they get that money from? Well, the
answer to this question can be easily traced with the
introduction of self employed loans in the loan market.
Self employed loans are tailored to meet the financial needs of
self employed people. They may need funds to expand or to start
a new business. Self employed people are identified as people
who operate their own business as a sole owner or as a partner
or a profession. Independent consultants and contractors are
also classified as self employed.
There are different characteristics of self employed people that
differentiate them from the working group. Self employed people
have unstable income as profits vary from one period to another.
They do not have proof of their income.
In the past, it was difficult for self employed people to borrow
money from the market. The main reason behind this is that they
do not have a regular source of income; this seemed to pose a
big hindrance in the path of getting finance for investment.
But, now time has changed. With the entry of self employed loans
it has become easier for self employed people to get an easy
financial help. With the increasing number of people who prefer
to work for themselves, self employed loans have now become
affordable and widely available.
Self employed loans can be secured or unsecured one. Secured
self employed loans are secured against the collateral of the
borrower such as a car or a house. Unsecured self employed loans
are not secured by any collateral, thus involve a high interest
Some lenders in UK offer flexibility to the borrower by
accepting overpayment, underpayment and payment holidays. Let me
explain these terms which will make it easier for you to
recognize the benefits of taking a self employed loans.
Overpayment imply that a borrower pay more money for a month
than the amount due. While underpayment is just the opposite of
overpayment, it gives the borrower the freedom to pay a lesser
amount in a month then the amount due. Payment holiday is
completely different from the two mentioned above. It allows a
borrower to skip a limited number of monthly payments after an
initial period of regular payments.
Lenders of self employed loan assess borrower's income to
evaluate the amount of risk involved in lending money to the
borrowers. They assess the income of a loan applicant basically
by two ways:-
* Self Certification - In this case, a borrower self declare his
income and the lender do not insist on considering the audited
accounts. But there are some lenders who will need a borrower to
submit an accountant's certificate. This is a document signed by
a borrower's accountant that entail that borrower has sufficient
income to pay the monthly installments and the loan. Most of the
lenders supplement this information with evaluation of the
credit score of the borrower.
* Certified Accounts- Certified accounts of the borrower will be
issued by the borrower's accountant briefing the details of the
borrower's income on yearly basis.
Lenders can arrange self employed loans for homeowners or
tenants for any amount ranging from £3000 to £ 250,000. With the
competition increasing day by day in the loan market, lenders
are ready to provide the loan at low interest rate. Interest
rate is determined keeping all these in consideration amount to
be borrowed, borrower's credit history and the loan term.
A good credit score will definitely help a borrower to get a
loan for a larger amount at low interest rate. But, this loan is
not confined to good credit people only. Bad credit, CCJ or
bankruptcy cannot stop you from getting this loan; however you
may get it at a bit higher rate of interest.
Survival of the fittest is the trademark used in the world of
self employed people. But to survive one need to match pace with
the changing technology which is possible only when you have a
financial backup. Self employed loans give financial support to
the self employed people so that they too can make a mark in the
competitive world and reach new heights of success.
About the author:
Amanda Thompson holds a Bachelor's degree in Commerce from CPIT
and has completed her master's in Business Administration from
IGNOU. She is as cautious about her finances as any person
reading this is. She is working as financial consultant for
chanceforloans .To find a Personal loans,bad credit loans,Debt
consolidation,home equity loans at cheap rates that best suits
your needs visit http://www.chanceforloans.co.uk
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