Get the Loan You Need Whether You're Self-Employed

You can qualify for a personal loan while you are self-employed.

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Applying for a Self-Employed Loan with Sprint Funding

Alternative Income - Bank Statements

• 12- and 24-month bank statements to 90% LTV at 660 FICO to $1.5mm
• 12- and 24-month bank statements to 80% LTV at 720 FICO to $2mm

Asset Utilization Qualification

• Qualify your borrower by dividing their assets over 3 YEARS!
• Up to 70% LTV for cash-out refinance
• Minimum FICO 660
• Max DTI 40%
• Primary Residence, Second Home or Investment

No Ratio Program

• No income or DTI calculation – qualify on asset balance!
• Up to 70% LTV – Purchase and Rate/Term
• Loan amounts to $2.5mm
• Minimum FICO 640

What is a Self-Employed Personal Loan?

When you’re self-employed, there often arises a sudden need for cash. Many are hesitant to look for loans because of a stipulation most lenders require: sources of income. It can be hard to justify where you’ll have consistent streams during leaner months.

Lenders may not want to look towards providing for the self-employed due to the risk involved.

Because of this unique need, some have begun offering self-employed personal loans. These cater to self-employed applicants who may need some cash in the short term.

You’ll find that these specific plans have more flexibility and openness compared to traditional loans.

Self-Employed Loan

Can You Get a Personal Loan If You’re Self-Employed?


But the process may be different, though not necessarily difficult. It’s a question of what risk is involved with lending money to you. This happens in underwriting, where the lender examines your debt, financial status, credit reports, and more.

Why would you want to take a personal loan? There are many reasons self-employed individuals do this.

These include:

● Wedding expenses

● Medical expenses outside of insurance coverage

● Vacations

● Home renovations

● Paying off other outstanding debts

● Education

Often, the lenders will want to add to the loan requirements. For example, some may want you to have an employed co-signer that will provide them more assurance.

Others may require collateral or change the loan terms to balance it. You’ll find that self-employed loans are more forgiving, though you’ll still have to do research to ensure it’s the right one to take.

Self-Employed Loan

What Types of Self-Employed Personal Loans are There?

Lenders often package their loan products with fancy names and other classifications.

However, you can categorize self-employed loans into four major types. Here’s what you need to know about the differences between each.

1. Secured

Secured loans have protection from an asset. It’s the most common self-employed loan to offset the risk as you’re giving collateral. The item must be of significant value for the lender to accept.

Some popular choices include:

● Car

● House

● Stocks and bonds

● High-value collectibles

The lender will hold on to a paper confirming the item’s ownership until you pay off the loan. That means they will have the deed to the house or the documents to your car. If the loan defaults, they will sell the property as collateral to pay the losses.

Many self-employed individuals seek loans because it allows them to borrow more money. Lenders are only comfortable releasing a lot of money if they know there’s something to cover them in case of a loss.

The asset provides security to them, showing your intent to pay the loan. You’ll find many secured loans from lenders, such as mortgages or auto loans.

2. Unsecured

As the name implies, an unsecured personal loan is the opposite of a secured one. There is more of a risk for lenders because they will not be able to recover anything with a default. Unsecured loans often have higher interest rates to offset this risk.

Many people seek unsecured loans first because they’re not comfortable with the idea of providing collateral. They’ll only seek secure loans when they know they no longer have the option to go after an unsecured one.

Applying for an unsecured loan means carefully examining the risk involved when lending to you.

These include:

● The time needed to pay the loan

● Your credit score and employment history

● Liquid money and value of assets

● Income sources

Unsecured loans are more common than you think. Most people will encounter credit cards and student loans, which are unsecured loans.

Most personal loans fall under unsecured loans because the borrower isn’t usually seeking large amounts. It’s rare for lenders to ask for collateral in these cases, but it can happen.

3. Fixed Rate

A fixed-rate loan refers to the interest rate. Depending on your loan’s structure, it could have this rate. No matter what happens to the market or the current environment, a fixed-rate loan assures that you’re paying the same amount for the entire term.

Borrowers often seek this first because it’s easier to compute payments. It’s also highly advantageous if you enter the loan in a low-interest environment.

However, the drawback is that your loan will never go lower than what you’re paying for it now. You sacrifice flexibility for assurance.

4. Variable

A variable interest rate means the amount you’ll pay will change regularly based on the market. Lenders usually follow an index like the federal funds (current interest rate). These loans have many benefits attached upfront, and it can feel good when you pay lower amounts during falling interest periods.

However, the issue is that you’ll always have to be aware of the payment you’ll need to make before spending anything. You don’t want to risk missing a payment or being late because you didn’t compute the higher interest rate.

There is a lot more risk involved, but variable loans usually cost less over the loan’s life.

What Features Should You Look For in a Self-Employed Loan?

As a self-employed individual, look for loans that provide you with the most value, and are also compatible with your current lifestyle.

Self-Employed Loan

Here are some of the most common features to look for when seeking a loan:

Flexible Repayment Schedule

You want lenders that offer you repayment that isn’t on a fixed schedule. That way, you can have some leeway as you work your way towards making payments on leaner months.

Depending on the contract, lenders can give out conditions where you’re free to pay within a time frame.

Extra Repayments

Money can always come in irregularly, which means that there might be times you want to pay more than the monthly debt payments. You’ll need an agreement where you can have extra repayments so you can hit the principal early.

The lender must be open to these conditions, or you’ll be stuck with the loan for the long-term.


The redraw allows you to take money from extra repayments you’ve made if you need them. It is perfect for the self-employed because circumstances can change fast. You want to have quick access to your money.

Early Repayment or Break Costs

Having an early repayment option means you can complete the loan at an earlier date. For example, you can pay off a three-year loan in half the time.

Doing this means there might be a break cost or a fee you need to pay to complete the loan, as the lender will not be getting the amount they expect from it.


Speed is vital when you’re self-employed. You’re likely always on the move, and the need for cash can come fast. You want a lender that can respond and process the loan quickly.

Applying for any type of loan can be stressful with all the requirements you need to submit.

When you are self-employed, the process can even be more challenging.

A personal loan when you are self-employed can be used for almost any purpose, lenders will need solid proof of income before approving your loan application.

If you’ve been wondering how to get approved for a loan if you are self-employed, we will lay out the SIX STEPS you can follow.

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1. Check your credit score

If you are self-employed and you want to get a personal loan, the first step is to make sure that you have a good credit score.  It will be a big hurdle if your credit score is low.

You can check your credit score for free online or you can ask your credit card provider to help you determine if your credit score will qualify you for a loan.

A credit score of at least 610is enough to qualify you for a loan but if you want the lowest interest rates, shoot for a credit score above 720.

If you check your credit score early on, you will have plenty of time to correct possible errors to increase your credit score so that you will get your loan approved.

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2. Gather the required documentation and information

To make sure that your application process will be smooth, prepare all the necessary paperwork beforehand.

These are the files that we will typically ask you to prepare for a personal loan while you are self-employed:

• Tax statements including tax transcripts and returns or schedules (Schedule C and Schedule SE) that provide more insight into business income and obligations
• 1099’s from companies that paid you for the past two years
• Bank statements
• Profit and loss statements

The general rule of thumb that you need to remember is that the longer you’ve been working for a company even if you are self-employed and earning a steady income, the better your chances of qualifying for a loan.

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3. Shop around and pre-qualify with multiple lenders

Each lender will differ on their policies and requirements for a personal loan when you are self-employed.

Hence, it is important that you shop around and see which lender will likely approve your loan at agreeable terms.

There are lenders who offer a prequalification process to make you know the terms you may qualify for and the needed adjustments if any.

Make sure that the lender does a soft credit check to protect your credit score.

Sprint Funding is a premier lending company that conducts a prequalification process and a soft credit check.

Our loan experts will help you from the day you call us until you get your loan approved.

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4. Choose a lender that fits your needs

Compare the rates and terms offered by different lenders that you scouted. You should not rely on a lender that offers the lowest interest rate but consider other important factors as well such as:

• Lender ratings and reviews
• Specific policies (if any) for self-employed people
• Referrals from your network

We have been providing personal loans to self-employed individuals for several years, and we will help you in the loan application process.

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5. Apply for a loan online or in-person

When you have decided which lender you will work with, apply for the loan.

Follow the loan application process of the lending company.  You may be asked to complete the application process through a phone call, visiting their office, or fill up forms online.

Be ready with the required documents and be responsive to your lender’s inquiries to hasten the loan decision.

Some lenders conduct a hard credit check at this point of the loan application process.

To avoid a negative impact on your credit score, make sure that you fixed all possible errors and improved your credit score before applying for a loan.

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6. Wait for the approval of your loan

The amount of time it will take for your lender to review your documents will depend on their policies.

You can receive a decision almost instantly if it were a regular loan, however, since you are self-employed, your lender will have to scrutinize your documents and other considerations.

Expect delays on approval of your personal loan as a self-employed individual.

If you are confident with your credit score, completed all the required paperwork, and you’ve had a steady income for the past two years, it may take a shorter time to get a decision.

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Be Qualified for a Loan Even if You Are Self-employed

You can qualify for a personal loan while you are self-employed.

The key is having a steady flow of income for at least two years to assure your lender that you can make monthly payments.

Know more about self-employed loans by calling us at Sprint Funding. 

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