Get Expert Tips on Secured Loans for Self Employed People!

Michelle Tuvey Michelle Tuvey | Loan Underwriter

As a self-employed individual, you probably know it can be difficult to obtain credit in a day and age when borrowing requirements are getting ever tighter. However, owning your own home could be your ticket to the long-term financing you need. Secured loans for self-employed individuals are available at very good rates and with manageable terms. Just as salaried workers can, the self-employed are able to leverage the equity in their homes for long-term financing.

Some self-employed individuals wonder whether a simple secured loan will cost them more due to their employment status. The simple answer to that question is 'no'. Because the secured loan is based on the equity of the borrower's home, lenders are not extremely concerned about the source of a customer's income. As long as that income can be verified, there are usually few problems.

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Having said that, the inability to verify your income could result in higher interest rates and less favourable terms. Remember, lenders offer loans based on the amount of risk they are taking in the loan process. Not being able to verify a borrower's income is considered a pretty substantial risk by banks. So if you are considering a secured loan any time in the future, set up a way to document your self-employment income now.

Bad Credit Okay

Another concern among the self-employed is bad credit. Let's face it; the financial crisis of a few years ago put many self-employed individuals in jeopardy. Those who survived the crisis may be enjoying a very healthy business today, yet they still have some bad credits left over from the past. Bad credit will usually not prevent you from getting a secured loan against your home as long as you have enough equity. The only downside is that you might pay a higher interest rate.

If you are concerned about bad credit, you can always inquire with a number of lenders to see what they say. You might also look specifically for lenders specialising in bad credit cases. Do not go to these lenders first, as they charge the highest interest rates, but keep them in mind in case more traditional lenders do not want to loan you money.

Our team of friendly experts have links with a whole of market panel of lenders which includes lenders that specialise in bad credit and those that allow some level of bad credit without penalty. Just call our advisers for free confidential advice on your individual circumstances.

Take Advantage of Your Home

Just because you are self-employed does not mean you shouldn't have access to consumer credit. If you own your own home, take advantage of it by applying for self-employed loans against your equity. A secured home loan lets you use your most valuable asset to secure funding for home repairs and renovations, debt consolidation, settling old debts, paying for emergency expenses, etc.

Are you concerned about how much you might be able to borrow? If so, calculating the equity in your home will give you an upper limit. Equity is the difference between how much you owe on your mortgage and what your property is worth on the retail market. For example, if you owe £100,000 on a home with a retail value of £175,000, you have £75,000 in equity. That would be your upper limit for borrowing with a secured loan.

Your home is your greatest financial asset. Rather than allowing it to just take money out of your pocket, put it to use as a financing tool to cover those major expenses that are draining your budget. Use the equity in your home to secure the funding you need. Secured loans for self-employed individuals are made available by multiple lenders around the country.

As always, be sure to compare lenders and loan products diligently. Pay attention to loan terms, representative APRs, loan-to-value ratios, and the minimum and maximum borrowing amounts. Only when you diligently compare can you ensure you are getting the best deal from your lender.

Whatever you’re personal circumstances our team of secured loan experts are here to help. We treat your call with the utmost confidentiality as we don’t work for the lender we work for you. Our team will help you every step of the way from comparing the best deals from the whole of the market to submitting an application that the lender will find favourable on your behalf. We take all the hassle out of finding and gaining approval for the right loan to suit your individual needs.

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