When one is self-employed and requires a personal loan, he/she requires some eligibility requirements. However, there are options available from both traditional and non-traditional lenders offering personal loans to self-employed individuals. Some lenders may approve the application in less than 48 hours.
Self-employed individuals can get mortgage loan in three ways;
- Through a specialist lender who provides personal loans for self-employed people.
- Apply for any standard personal loan if one can meet the documentation requirements as an employed person.
- Apply for a low doc loan, which requires fewer documents, although this type of loan is usually more expensive than a traditional loan.
However, you can find personal loans that have terms ranging from six months to five years or more. You will also be making monthly principal and interest repayments on your loan amount. Therefore, depending on your lender, you may be required to put up collateral as security for your loan. In essence, the only reason you should apply for a low doc loan is if you cannot meet the documentation requirements set out by a standard personal loan. Low doc loans normally have higher rates and fees than standard loans, so you do not want to apply for one unless it is your only option. Visit this site for more information : http://www.mortgagebroker247.com.au
For self-employed applicants, lenders usually require any or all of the following documentation.
- Tax returns. Be prepared to show the last two years of your full personal and/or company tax returns. These will help prove any income you declare on your application.
- Financial statements. These may include any profit and/or loss statements to also support the income you declare.
- Proof of rental income. If you have any income from rental properties, you can declare this with real estate statements or copies of your executed lease agreements.
- Notice of assessment. Make sure you have on hand your latest notice of assessment (NOA) given to you by the Australian Taxation Office. This shows tax information such as the amount of income tax you owe. Depending on the lender, you may need to provide your NOAs from the last two years.
- Recent bank statements. This includes statements showing your savings and business transactions. It may also include statements showing any other outstanding loans or credit cards you have with other lenders.
- Company specific information. If you own your own business, be prepared to provide information such as your company’s ABN, address, etc.
- Personal identification. Depending on the lender, this may be your Australian driver’s license, passport or proof of age card. You will either need to copy your ID and fax it over to the lender or scan it and attach the digital file to your application
The following factors should be considered when comparing the loans offered by different lenders:
- Interest rate. Make sure you know the difference between a fixed and variable interest rate.
- Turn-around time. Depending on why you are applying for the loan, you may need your money disbursed within a certain timeframe.
- Before applying for any loan, check what the eligibility requirements are.
- Application process. When comparing different lenders, be aware of the application process specific to each lender and what kinds of challenges or difficulties you may face when applying.
- Loan cost. Make sure you are aware of all fees associated with each loan
- Secured vs. unsecured. Always check to see if the loan you are considering is secured or unsecured mortgage loan.