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Jan 09

Borrowing when you are self-employed

Posted by:AutoMoney

When you are self-employed, you are the boss – it can be a rather liberating experience and one that really does put you in control. However, it can be more difficult to borrow money when you need to, which can sometimes have a detrimental impact on your life or business.

the bossWhen you are self-employed, you are more prone to having a variable income stream – some months you may do lots of work and others not so much, meaning that you are seen as having a ‘fluctuating income’ in the eyes of the bank. This means that they will be less likely and less willing to lend money to you, but it is not impossible. As is normal with the loans industry, it is key that you have a good credit and history, with no defaults or CCJ’s against your name.

However, if you are still struggling and do not have a solid enough credit rating to be considered for a loan from a bank, there are other alternatives you can consider, such as a logbook loan.

As long as you have a car that is free of finance and a logbook (V5) in your name, you will be eligible, provided you have sufficient net income to repay the monies borrowed. Any credit problems in the past will be considered on an individual basis, so may not automatically prevent you from getting a loan. The logbook lender will also look at your other financial obligations, to ensure you are not taking out a loan you cannot afford to repay.

Application Documents

To apply for a logbook loan, you will usually need to present the following documents at the time of application:

• The Logbook (V5), which needs to be in your name

• Proof of your Income (Eg. Recent payslip, tax return, bank statement, benefits statement, etc)

• A recent utility bill

• Some form of ID with your photo on it (Passport, Driving Licence, Work ID card, etc.)

Regardless of whether you are a start-up business, or have been established for a number of years, being self-employed does not have to be a penalisation when looking to borrow money – even if you are refused a loan from other avenues. At AutoMoney we are happy to consider applications from the self employed.

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Borrow with confidence

Borrow with confidence

We are PROUD MEMBERS of The Consumer Credit Trade Association. AutoMoney were forerunners in the creation of The CCTA Lending Code of Practice and we adhere strictly to its principles. Click here to view. ALWAYS MAKE SURE THE LENDER IS A MEMBER.

350.5%APR Representative
Representative example: Loan amount £1000. Duration 18 months. Repayable by 16 monthly repayments of £170.42 and one of £198.42 (includes Bill of Sale registration fee of £28) commencing two months from the date of the loan. Total amount repayable £2925.14. Rate of interest 187% per annum fixed. Representative 350.5%APR. LOANS ARE SECURED ON YOUR CAR. The vehicle may be repossessed if you do not keep up the repayments.