When you need money, you need money, especially if you’re
self-employed and have an irregular income. Finding the right online personal
loan lender can help you secure financing quickly. Going the more traditional
route (bank or credit union financing) can leave you waiting for weeks. Online
lenders can often offer turnaround times of just 24 hours.
Our team of financial experts reviewed and ranked more than
30 online lenders to help you get funded. Here are the 7 best online lenders we
found.
When choosing the right lender, there are a number of
factors you want to look into. We considered the following when choosing the
best personal loans for self-employed borrowers:
With Upgrade, you’ll have loan amounts ranging from $1,000 -
$50,000 with an interest rate between 6.55%-35.97%. Upgrade offers loans for
most credit ranges, but the higher interest rates will go to those with lower
credit. Additionally, you’ll choose terms between 24-84 months, giving you
plenty of wiggle room in how much you’ll pay each month. The only potential
negative is the origination fee, which maxes out at 8%.
Upgrade is a good option for self-employed borrowers because they offer a customizable term length and have options for borrowers of any credit and income. And for those who need their money quickly, Upgrade promises turnaround times of one business day once your info is verified. Plus, you can easily pay off your loan early with no additional fees.
Best Egg offers a wide range of terms with 36-60 month repayment options and no penalties for paying off your loan early. Plus, those with excellent credit can qualify for a fixed rate as low as 5.99%. The only catch is you need a minimum credit score of 700 to qualify for a loan through Best Egg, so those with poor credit should try looking elsewhere.
Upgrade allows self-employed borrowers to really dive deep into researching the loans they need with their resource center. Plus, when it comes time to check your rates, they offer an application process that takes a matter of minutes.
While Fiona isn’t a direct lender, they only work with the best, so you’ll find rates starting at 3.99%, which are some of the lowest in the industry. Additionally, Fiona offers to match you with loan amounts all the way up to $250,000. Any credit score is welcome on Fiona, you should just expect higher interest rates.
Fiona is perfect for the self-employed freelancer who has no free time and needs to compare loan rates quickly. Instead of completing the application process at each individual lender, you can start with Fiona to get an idea of what your next step should be.
LendingClub offers loans up to $40,000 and while they focus on debt consolidation, they over personal loans for any purpose. You’ll typically get repayment terms of three or five years, which is a little more strict than other lenders, but may work perfectly for those looking for a fixed rate and a fixed monthly payment.
LendingClub is perfect for the self-employed borrower who wants to focus on paying off debt. If you have good credit, you can qualify for low rates, and many borrowers can get next-day funding once they’re approved.
For good credit borrowers, SoFi is a dream lender. They have good interest rates with a discount available when you enroll in autopay. Plus, they offer loan amounts all the way up to $100,000. You will have to take out a minimum of $5,000 to get a loan, so those looking for small loans may want to consider a different lender. However, unlike some lenders, with SoFi you won’t have to pay any origination fees and there are no other hidden fees, either.
SoFi is a well-respected lender for a reason. They offer tons of perks including an autopay discount, no fees, and even unemployment protection in the event that you lose your job. With low interest options and a ridiculously fast application process, SoFi is a worthy contender.
Credible works with a huge number of lenders to offer you rate quotes that are truly the best. With rates starting at 3.99% and loan amounts ranging from $600 to $100,000, you’ll be able to easily see many options all with a quick application. Even if you don’t want to apply, you can see a range of loan lender options and their terms on Credible’s personal loan page.
Credible makes rate shopping easy and can save you tons of time when looking for a personal loan. With their Best Rate Guarantee, you can be sure your rate options are some of the very best.
Avant offers loans between $2,000 and $35,000, so you won’t be getting the largest loan amount around. That said, Avant offers a personal touch with their live support option. Avant does provide terms between 24-60 months, so you can choose from a variety of options depending on the monthly payment you want. Be aware that there is an administration fee of up to 4.75% on your loan, so make sure to factor that into the cost of your loan.
Avant offers fast funding for smaller loan amounts up to $35,000. While you will have to watch out for their fees, they allow lower credit borrowers to qualify for loans with decent rates.
Company Name | Est. APR | Min. credit score | Loan Amount | Loan term |
Upgrade | 6.55%-35.97% | N/A | Up to $50,000 | 24-84 months |
Best Egg | 5.99%–35.99% | 700 | $2,000–$50,000 | 36-60 months |
Fiona | 3.99%+ | N/A | Up to $250,000 | 6 - 144 months |
LendingClub | 6.34% – 35.89% | 700+ | Up to $40,000 | 3 or 5 years |
SoFi | As low as 6.99% APR | None | $5,000-$100,00 | 2, 3, 4, 5, 6, and 7-year terms |
Credible | 3.99% - 35.99% | N/A | $600 to $100,000 | 1-7 years |
Avant | 9.95%-35.99% | 600 | $2,000-$35,000 | 24 to 60 months |
Whether or not you should take out a personal loan as a
self-employed individual depends entirely on why you need the funds. Even if
you are a sole proprietor, using a personal loan for business purposes may not
be the best option. You can get business loans specifically designed for
funding business needs.
If, however, you need a loan to fund personal expenses or
even very small business equipment needs, a personal loan might make sense. As
with any loan, seriously consider if you need the money before taking on
additional debt.
Most lenders make your credit score the number one factor
behind your interest rate, so ensuring you have the best score possible can get
you the best rates. Making any debt payments on time, taking out loans in
responsible amounts, and using credit wisely are all ways to keep up your
score.
Keeping track of past tax returns, W-2s, and other financial
records can help you when you need to apply for a loan. Since you’ll be asked a
variety of questions when applying, having these forms at the ready will make
the application process run a lot smoother.
Since you’ll be paying interest on any money you borrow, you
should avoid borrowing more than you know you’ll need. There’s no point in
paying interest on money you’re not using.
If you don’t have the credit to get a reasonable interest
rate, you can consider asking a family member or a trusted friend to co-sign on
your loan. Only do this if they have a better score than you. Additionally,
they need to understand that co-signing means they’re taking responsibility for
the loan in the event that you can’t make payments.
Home Equity Loans and HELOCs let you take advantage of your
home’s equity and borrow against it. You can often borrow up to 85% of your
home’s value and use it to make home improvements, pay down debt, or other
financial needs.
The biggest con of these loans is that your home is used as
collateral for the loan. In the event that you can’t make payments, the lender
can seize your home to pay down your debt.
Secured personal loans also require some form of collateral
like your car, for example. These loans tend to be better options for those
with lower credit that can’t qualify for good rates on unsecured loans.
While 0% APR credit cards can be used to pay off other debt
or make larger purchases, those without 0% APRs will likely be paying much
higher interest rates than those on personal loans. As long as you know you can
pay off the credit card during the intro APR period (typically 18 months at
most), these can be a good alternative.
Self-employed workers have business expenses they need to
take care of. Business loans through the SBA or directly through lenders are
good options when you need help with expenses related to your business. They
often come with more reasonable requirements.
Payday loans, while they are an alternative to personal
loans, are never a good idea if they can be avoided. They’re designed to keep
you in a cycle of debt by offering interest rates of 100%+ and short repayment
periods. They often don’t have credit score minimums, which is what draws a lot
of people to them, but stay away from this option if you can.
When it comes to securing personal loans when you’re
self-employed, the process will be mostly the same as a W-2 employee. The only
difference is you’ll need to be able to provide more proof of income. There are
many lenders that can help you get the funding you need, when you need it.
We’ve created our list of the best personal loans for self-employed people in
the hopes that you’ll find a lender who can offer you the best rate possible.
When applying for a personal loan, providing proof of your
income is going to be an important part of the process. The lender wants to
know you have the money to pay them back. When you’re self-employed, providing
proof of this income can be a little more complex than just showing a W-2.
You’ll want to provide tax statements and 1099s, so make sure to keep track of
these.
If you’ve been self-employed for at least a few months,
preferably a year or more, it shouldn’t be any more difficult to get a loan.
You’ll just need to be able to prove a semi-consistent income. For those just
starting out in self-employment, that’s another story, since it’ll be more
difficult to show this consistent income.
By providing tax statements and 1099s, you can show that you
do make a regular income from self-employment. Bank statements that show
regular deposits of income can also help, as well as profit-and-loss statements.
If you don’t have an income, applying for a personal loan
isn’t a good idea. You need to have a way to afford the monthly payments. You
could look into applying with a co-signer who has a good credit score and a
consistent source of income.
Some of the best rates hover around 4%-6%, as you can see
from the lenders above. You’ll only qualify for these rates with an excellent
credit score and a consistent income.
Aggregators like Fiona and Credible can help those with poor
credit find lenders that could potentially offer them loans. It’s important to
know that with bad credit, you’ll get high interest rates that can add hundreds
or thousands to the total cost of your loan.
Yes, self-employed freelancers can get personal loans as
long as they can demonstrate a consistent source of income. So keep track of
1099s and bank statements.
Many different factors go into deciding your interest rate
including your credit score, so it’s not likely that someone’s employment type
will have too much of an effect as long as income can be verified.
Christopher Murray is a professional personal finance and sustainability writer and editor who enjoys writing about everything from budgeting and saving to unique investing options like SRI and cryptocurrency.
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