From data reported by Index Mundi a few years back, it was observed that about 60% of Nigerians are self-employed and they need some loans at a point in time for their businesses. This birthed the question of whether a self-employed individual can get a payday loan to support their business or raise some capital.
What are Payday Loans?
Payday loans are loans usually given on a short terms to help self-employed individuals for their short term business goals. These loans are designed to stand for salary earners who urgently need money to fix something before their payday.
To get a payday loan, there are procedures that must be followed such as filling out an application form and some other things. Once your application is approved, you will be asked to write a cheque for the amount needed, which will also contain interest.
Can Self-Employed Individuals Get Payday Loans?
Payday loans are available to self-employed individuals.
Payday loans serve as another alternative for the self-employed to fix money-related issues in their business, it also allows self-employed individuals with low credit scores to borrow loans without strict procedures.
What do Self-Employed individuals need to get a payday loan?
To get a payday loan as a self-employed isn’t that hard. Although, you might need to submit your bank statement and some loan collateral for financial reviews to assess whether you’re fit for the loan. Below are a few things needed to get you started with the payday loan application as a self-employed individual.
- Your Bank Statement
Your bank statement will help the financial advisor to ascertain whether you will be able to meet up with the loan repayment. A thorough assessment will be done within the last 3 months of your transactions.
This will also give the lending party the right information about your income and how you will be able to repay the loan.
- Loan Collateral
Loans usually come in two forms. Secured loans are given based on your credit score only after being ascertained by a financial expert and unsecured loans are usually backed up by collateral such as your real estate property or valuables.
So if you’re self-employed looking to get a loan, putting up your real estate property might be the best option for you as long as you can back before the deadline and likewise, if you have a good credit score, you will easily secure a loan without backing it up with collateral.
In simple terms, putting up your collaterals usually decrease the risk on the lender’s end and that increases your chances of getting approved for the loan. However, if you’re unable to pay back this loan, you might lose the right to access your collateral permanently as lenders would not risk losing their money too.
Payday loans are available to self-employed individuals. Although, it might be difficult to get approved but, making a detailed research and good decision-making will go a long way in helping you achieve your goals