Are You Self-Employed And Worried About How Hard It Is To Get A Car Loan?

Are There Easy Ways?

Self-employed individuals discover that attaining a car loan is not an easy thing, and it’s no different if they plan on using a car for themselves or their business. However, the proper choices and a little bit of homework can yield a handful of potential possibilities. Innovative and new banks, finance companies, lending institutions, and brokers are around and willing to finance cars for self-employed professionals.

The opening up of the loan markets is the driving force behind this, as more banks and businesses than ever before are now allowed to lend people money. That makes demand for lenders weaker, so the ones still on the playing field must compete harder for business, and that’s a win for borrowers, who get better terms and conditions.

Self-employed professionals win even more in this arrangement. If you work for yourself and need a vehicle, either for personal or business use, then getting a loan is just a matter of doing your research into the possibilities and then choosing the loan that is right for you.

What Options Are Available?

Car loans generally come in two forms. The first are unsecured loans that you can be approved for without providing any kind of security or collateral for the loan. You just need proof of business ownership and sufficient monthly income to cover your basic bills and ability to repay the loan. Bank account statements typically serve well for this as proof to lenders.

The other kind of loan form is a secured loan. For a loan like this, you do have to provide some kind of security to base the loan off of, such as a fixed asset such as your home. So, you need to think hard about whether you want to take this risk, because if you fail to pay back the loan, the bank can seize your home or other secured assets to take back what was lent. The other point of consideration is the interest rate.

Interest rates tend to be lower for a secured loan, even though these loans are more likely for someone with bad credit or who has a hard time proving income. Unsecured loans do offer the benefit of not risking your home, but that is counterbalanced by the higher payments required each month.

What Happens During The Application Process?

Once you decide which loan type is right for you, you must get your proof of income and other needed documentation together. Banks want to see that even self-employed individuals have steady or regular monthly income, and that there is a long-standing history of it. With good credit and steady income, even a self-employed professional can get a car loan.

You might even find loans like this online, which is a great time-saver for someone working online from home. This saves you running around town visiting brokers and lenders, and response times online are usually pretty prompt. Look around some, and you’ll find brokers who have a particular interest in lending to self-employed professionals.