Can Self-Employed Individuals Get Payday Loans?

With the percentage of self-employed individuals in Nigeria estimated to be 81.29% in 2019, many people wonder if self-employed individuals can obtain payday loans.

Financial difficulties are a reality for many self-employed individuals, and instant cash loans can help them recover from losses.

This article explores the question of whether self-employed individuals can get payday loans.

What Are Payday Loans?

Payday loans are short-term loans designed to help individuals bridge the gap between paydays. These loans are suitable for short-term financial problems and can provide borrowers with the money they need urgently.

To obtain a payday loan, an individual needs to complete an application form with a payday loan firm. If the application is approved, the borrower must write a check for the specific amount of money they wish to borrow, including the lender’s standard fees and interest.

Can Self-Employed Individuals Get Payday Loans?

The answer is yes, self-employed individuals can get payday loans. In fact, some payday lending corporations cater exclusively to self-employed people.

These companies do not reference an individual’s credit history and can provide loans to self-employed individuals with poor or no credit.

This makes payday loans a viable lending alternative for the self-employed. In contrast, conventional banks may turn down self-employed individuals who attempt to borrow money.

How Individuals Get Payday Loans?

To receive a payday loan, the lender typically reviews your financial health. This involves assessing your creditworthiness by examining your bank statement and loan collateral (for secure loans).

Bank Statement

The lending establishment usually requests your most recent paycheck stub instead of asking for your credit score. To clarify several things, you must provide your bank statement.

Your account statement must show that you have money in your account and receive a regular supply of income. This assures the lender that you can repay the loan.

Additionally, you need to show approximately three months of your bank statement to discern your income and how much you can afford to borrow. The requirements may vary for different payday loan vendors.

Loan Collateral

Loans come in two forms: unsecured and secured. An unsecured loan is provided based on your creditworthiness and is backed by nothing. In contrast, a secured loan is backed by a real property that has reasonable value, such as a car note or mortgage.

If you have a bad credit score and cannot obtain an unsecured loan, you can opt for a secured loan by “putting up” collateral like your car, house, or savings account.

Collateral decreases the lender’s risk, increasing your chances of approval. However, if you cannot make monthly payments on a secured loan, the lender has the right to take possession of your assets.

What Do Self-Employed People Need To Get a Loan?

Self-employed individuals can obtain payday loans, but it can be difficult. However, with comprehensive research and good decision-making, self-employed people can overcome financial emergencies.

Bottom line: To compare loans from several lenders in minutes and make the best decision for you, check out this loan comparison platform.