There’s nothing quite like the independence of owning your own business or having your own freelancing gig, but the downside comes when it is time to secure a personal loan, as it can be a bit trickier.
But that doesn’t mean it’s impossible, as there are plenty of lenders out there that will be willing to offer you a fast cash loan, as long as you provide some extra documentation to verify your income.
Ready to get started? Here are some of the documents that you might need to provide for your personal loan approval:
To take out a personal loan, most providers in New Zealand require you to have been working for at least one year and usually like to see two years’ worth of tax returns.
The reason for this lengthy period, is because lenders will want to see what your yearly expenses are (e.g liability insurance, tools, equipment) for a clear picture of how much disposable income you have at the end of the day, once all your business expenses are taken out.
Another way that the lender will be able to assess your risk category is by seeing your recent contracts or work statements, which will help prove that you’ve had a regular cash flow.
Don’t have any contracts or work statements? Then the provider may ask you to complete an income declaration form, as well as show your balance sheet with your profit and loss for the last two years.
If you have your own business in New Zealand, then you should have an IRD number and/or a New Zealand Business Number, which the provider will ask for when you apply for their personal loan.
The lender will also want to see the money that is coming in and out of your bank account (usually for the last 90 days), to get a better understanding of your financial situation.
Other than your bank statements, you could also be asked for your credit card, store card or utility bill statements, so the provider can see that you have being paying back your current debt.
The reason providers are less likely to approve a personal loan for someone that is self-employed is because it is considered a higher risk loan.
So if you own a car or property, you usually can use your asset as security for the personal loan and the provider will be more likely to approve you for the loan. This is dubbed a secured loan.
Just keep in mind that a secured personal loan is a risky option because if you’re unable to meet your personal loan repayment schedule, the provider can seize your assets for financial retribution. So always weigh up your options and only apply for a personal loan you know you will be able to repay, in the agreed timeframe.
Other than the documentation mentioned above, you also will need to round up your identification like your driver’s licence, passport or birth certificate, if it’s a new provider you will be taking out the loan with.
Ready to kick start your personal loan application? Then contact one of the friendly personal consultants at Rapid Loans to secure your Fast Cash Loans today!