Are you a someone who works for himself and wants to take a loan for debt consolidation, home improvements, car loan, caravan loan, house deposit, business purposes, Christmas cash, funeral, holiday, boat loan, motorbike loan, cosmetic surgery or a wedding? If the answer is yes then self employed loan is what you need to look out for.

What are self employed loans?

Self-employed loans are those loans that are taken by the self-employed people from the different lending institutions.

Who is a self employed person?

A self employed person could be an individual who operates a business or profession as a sole proprietor, a partner in a partnership, an independent contractor or a consultant. How are the self-employed loans different from other loans? Since the loan is given out to individuals who have a variable income, lending institutions find it difficult to evaluate their loan application. The loan rate depends on the fact whether you have certified accounts. In case of employed people their salary certificate becomes an easy source of information to gauge their income.

The income tax returns could also be looked at but the difficulty arises because they are mostly understated. In case of self employed loans the business should not be less than two years old.

More flexibility has been incorporated into the repayment schedule of these loans. Some of the features that have been incorporated into the repayment schedule are overpayment, underpayment, and payment holidays.

Types of self employed loans

Self employed loans can be either secured or unsecured. Secured self employed loans are available at lower interest rates because the loan amount is given against some security. The security is usually home and real estate. This type is loan is suitable for taking a larger loan. Unsecured loans are available at higher interest rates and will not require any security. Since the interest rates are high unsecured loans are better suited for taking smaller amount loans.

How convenient is it to procure these loans?

Earlier self employed loans used to be difficult to find and expensive to procure. However now with more people being self employed, self employed loans are more widely available and are more affordable.

Even if the borrower has an adverse credit history or bad credit rating, such as mortgage arrears, credit card problems or payment defaults these loans are available at a price. The rates vary from 10.9-27.60% APR with an average of around 17.5%.

Most lenders are offering self employed loans with