6 Rules to Follow for Bad Credit Loans when You’re Self-Employed

By Angela Monroe - March 21, 2018

If you’re self-employed and your credit situation isn’t the best, obtaining a car loan or personal loan can be difficult. Lenders are often wary when it comes to giving out bad credit car loans, even more so for self-employed people.

However, there are some things you can do to obtain a car loan on bad credit. While some lenders won’t consider your application, there are many other lenders who will. It’s all about approaching the right lender and offering them a proper loan application.

Today, we’ll take a look at six rules you should follow if you’re self-employed and looking for bad credit loans. By following these rules, you’ll put yourself in a much better position to get a bad credit car loan or personal loan.

1. Repay your existing debt

One of the first thing that lenders look at before offering you a loan on bad credit is your existing debt. If your existing debt is too high, lenders will get the impression that you already have too many repayments to make. They will be apprehensive because they won’t be sure if you have the repayment capacity for another loan.

Before you apply for a bad credit loan, make sure to repay as much of your existing debt as possible. This will show lenders that you are financially responsible, despite your bad credit profile. You’ll improve the chances of your loan application getting approved by doing so. Also, by repaying your existing debt, you’ll make your new car loan repayments more manageable.

2. Review your credit history for errors

Your credit history is something that all lenders look at before approving bad credit loan car loans and personal loans. They will carefully go through your credit history to determine if you have been financially responsible in the past. If you suffer from bad credit, it is very important to review your credit history for errors. Errors in your credit profile will reduce the chances of your loan being approved.

Check your credit profile and if you find any errors, report it to your credit bureau or reporting agency. Make sure that your credit profile is error-free before you approach any lender for a loan on bad credit.

3. Get a guarantor

One of the best ways to get a bad credit loan when you’re self-employed is with the help of a guarantor. A guarantor is someone who will give lenders a guarantee that you will repay the loan. This guarantor needs to have a strong credit profile in order for lenders to accept your application.

If you have a spouse, relative or friend with a good credit profile, you can ask them to be your guarantor. If they agree, your loan application should get approved without too many problems.

4. Get your documents ready

As a self-employed individual, you will need to get several documents ready before you apply for bad credit car loans. Remember that lenders are usually stricter with business owners and self-employed people. It is a good idea to get your documents in order before you approach a lender.

The documents that you will need to provide lenders include your financial documents including your notices of assessment and tax returns. If you cannot provide these documents, then you will have to provide your bank transaction history to lenders. Apart from these, you’ll need to have a valid driving licence in order to apply for a car loan.

5. Be truthful with your application

When you apply for a car loan on bad credit, you must be prepared to be completely truthful with your application. Do understand that when a loan application gets rejected, your credit profile takes a hit. If you’re already suffering from bad credit, you simply cannot afford to let your profile slip further.

Make sure not to overstate your financials in your loan application. This will only sabotage your efforts and give lenders an impression that you’re trying to defraud them. Provide as much detail as necessary in your application and always be truthful. This will increase the chances of your loan application getting approved.

6. Take the help of professional finance consultants

There’s certainly a lot of work involved with getting bad credit car loans and personal loans. Furthermore, if you’re self-employed, then getting your documents and credit profile in order will also take more time. A professional finance consultant can help you with the whole process.

Professional consultants such as Loans for People with Bad Credit can help you obtain a car loan efficiently. We help people looking for bad credit loans on a regular basis. We’re well aware of the processes involved and we can effectively guide you to acquiring a loan on bad credit. Our consultants can help get your paperwork in order and review your credit profile. We’ll make sure that your loan application is presented in the best possible manner to lenders.

We also have access to a range of lenders offering different types of bad credit loans in Australia. We can match you to the right lender for your needs and negotiate on your behalf. We’ve helped many people obtain bad credit car loans in Australia and we can do the same for you!

Get in touch with us to apply for bad credit car loans

Even if you’re self-employed and suffer from a bad credit profile, you can acquire a car loan. But, you will need to ensure that your credit profile is free from errors and that your documentation is in order. You also need to be truthful with your application. If possible, get a guarantor, and repay your existing debt to increase the chances of your loan application getting approved.

To ensure that your loan application gets approved without too many hassles, consider us at Loans for People with Bad Credit. Our expert consultants will offer you support and guidance and help you get a loan with the best interest rates.

Get in touch with us to talk to one of our expert car finance consultants today!

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.

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