How to Apply to get a personal loan If You're self-employed

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How to Apply to get a personal loan if You're Self-Employed
Make sure you have a copy of your taxes, bank statement, and other documents to prove your earnings.


Updated on Sep 21st 2021.

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A could be an option in case you're looking to consolidate your high-interest debts into one installment or fund a major project like a home renovation. But qualifying for a personal loan can be a bit more complicated if you're self-employed. The reason is that the lender might require documents to prove your earnings during the process of applying.
For a lot of applicants, that means providing the employer with W-2s. If you're self-employed you don't have W-2s. Still, applying for a personal loan if you're self-employed is possible. You'll need various documents in order to submit when the lender requests these documents.
Information you should provide when you first make an application for an individual loan
A usually will ask for:
Personal information such as your contact details at home, birthdate, Social Security number and citizenship status.
Information on financials, such as the annual income, sources of income, and monthly housing expenses and the amount of debt.
Employment information including your employment status, your current employer and the amount of time working there.
Information on loan requests, including the reason you want to take you seeking the loan and the amount you want to get.

Certain lenders let you pre-qualify for the personal loan, meaning you can see what loan terms you're eligible for, even without a . That can spare you the temporary damage to your credit scores as you evaluate your choices.
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How to prove self-employment income
As the lender evaluates the loan application, it will require additional proof of the income information you shared with them. This is why it's important for you to prepare, especially in the case of self-employment.
Have these documents on hand to prove your self-employment income:
Federal tax returns for the last two years, including all schedules, .
1099s for the past two years.
Bank statements.

These documents are also helpful when your income is derived from more than one source, like contract or freelance work with several clients.



About the author: Sara Rathner is a NerdWallet travel and credit cards expert. She has been featured on the "Today" show, Nasdaq as well as CNBC's "Nightly Business Report."







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