Loans for the self-employed? This is how it works!


It is often much more difficult for self-employed people to get a loan than for normal employees. As a self-employed person, you usually need a loan much more urgently than a normal employee in order to further develop your business activities. Many banks refuse to lend to the self-employed.

Most of the time, the reason is that the monthly income of the self-employed is not constant and can vary greatly from month to month. Even if you have worked successfully for many years as a self-employed person, it may still be very difficult for you to get a loan from a bank.

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If you manage to get a loan from a bank as a self-employed person, you will notice that you can only get it on special terms, which are less favorable than normal employees. Self-employed people usually pay higher interest on a loan.

If you thought that you would benefit from the current low-interest rates, it is not entirely impossible for the self-employed. Fortunately, there are direct banks that provide self-employed loans with low-interest rates and quick lending.

Self-employed people usually take out a loan for private or business purposes. No matter for what purpose, the self-employed mostly apply for loans for:

  • Buying a car
  • Renovation or modernization
  • Building loan
  • Debt rescheduling
  • Buying property

You can also use the loan for private purposes as a self-employed person to bridge financial bottlenecks when they arise. Business loans are usually taken out to expand the company, such as buying new machines or expanding the production plant. Very often self-employed people find themselves in the situation of needing a loan to be able to complete an order.

This includes orders for the self-employed, for example, who need suitable machines or have a shortage of material, and have to buy them again. Most of the time, clients do not pay anything in advance, so as a self-employed person you often have to take out a loan, so that loans can be essential for your survival.

It is very important that the funds are provided very quickly so that an instant loan may be required for you. You can only apply for a loan online because quick processing is necessary, which is hardly possible with a normal house bank.

However, not all direct banks offer instant credit for the self-employed. Many banks also protect themselves from default on payments in such a way that they set interest rates for the self-employed particularly high.

In the normal case, the process of applying for a loan is as follows:

Determination of loan requirements

First of all, you should calculate the amount of the loan. In this phase, it would also be good to consider whether your loan requirements are really that high or whether you have more equity

Calculation of the term and conditions

After you have determined the loan requirement, you must also calculate the terms and terms of the loan that you can actually afford. It is important to note that your income can fluctuate over time, so a longer-term would be reasonable.

But you should still remain flexible since some offers also allow free special repayments. This way you can reduce the interest charges and installments somewhat if you have higher earnings.

Submit the loan application

After you have carried out the credit comparison, it is now time for the personal data to be requested in the next step. Here you can also specify whether you want to include a second borrower in the application. This can significantly improve your chances and also make the conditions cheaper. Finally, the information about your income situation is queried. Here you should have the latest business evaluations and income tax assessments on hand.

It is also important to note that you can still withdraw from the application. Even if you think that your problems can be solved in a few weeks, you should send the loan application. Every bank needs several days to process the application and create an offer. According to the legal right of withdrawal, you can withdraw within 14 days after signing the contract without having to justify it. There are also banks that offer longer withdrawal periods (up to eight weeks).

Types of credit

Types of credit

There are usually different types of credit for the self-employed, which differ from each other. Before you go to the bank, you should find out about these. Some of them are:

Investment credit

This loan is mostly used to finance fixed assets. This includes machines, buildings, vehicles or land. The duration of the loan depends on the duration of use you are aiming for. This means that the longer something is used, such as a building, the longer the financing will take place.

This will ensure low rates but unfortunately will also result in high-interest rates. The sum of the loan is selected at the beginning and cannot be made in parts. Unfortunately, young entrepreneurs have little chance of getting this loan.

Current account credit

You don’t always need a loan. The self-employed often find themselves in the situation that they need certain security or “nest egg”. The best solution for this is an on-demand loan. A current account credit (or working capital loan) is very suitable for this purpose and offers you enough scope.

However, it is not easy to get such a loan. The prerequisite for such a loan is that your company works properly and is stable enough. But once you get this loan, it is rarely revoked.

Do your thing, not your taxes

Do your thing, not your taxes

Liability loan

This loan is also known as a bank guarantee. Basically, the principle is simple here: The bank provides a certain amount that the customer can use if he cannot meet his financial obligations. A big advantage here is the low-interest rate.

When it comes to a loan for the self-employed, creditworthiness is crucial. Banks protect themselves from payment defaults with, particularly stringent credit checks. In times of low-interest rates, workers can benefit from favorable conditions for their loans, but the situation is usually very different for loans for the self-employed. It is important for every bank that borrowers pay their installments punctually and permanently.

Since the self-employed do not have a stable income, this cannot always be the case. This is the reason why some banks do not lend to the self-employed at all. Fortunately for the self-employed, there are banks that first check the requirements and then decide whether to grant a loan. This also includes online banks.

For the credit check of self-employed people, different evidence is often required than for employees. After all, the self-employed have no employer and no stable income. So if you want to have a loan for the self-employed, you have to submit the following for your credit check:

  • Income statement
  • Proof of income tax
  • Bank statements
  • Surplus and income calculation

The above evidence is required whether you want to apply for a personal or business loan.

Based on the loan application, on which you, as a self-employed person, have to provide information about the loan amount, purpose, duration, and your company and other submitted evidence, the bank will create a rating and check whether a loan for the self-employed is even suitable for you. If the loan can be granted, the amount of interest will be determined based on your rating.

The worse your credit rating, the higher the interest on the loan will be. When it comes to loans, Credit Checker information is required not only for employees but also for the self-employed. In the event that you have a negative Credit Checker entry, you, unfortunately, cannot get a loan.

The question arises of what you can do with a negative Credit Checker entry. There are also providers who offer loans for self-employed people without a Credit Checker but have a high processing fee, even if you cannot guarantee this loan.

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