Loans for the Self Employed
February 18, 2012
Over the past few years, lending regulations have become more burdensome. As a result, it is more difficult to qualify for a loan in general.
With this in mind, self employed individuals may find it even more difficult to get a loan these days. This is because traditional lenders tend to prefer those with a steady income that is easily provable. As a self-employed individual, you probably don’t have a regular paycheck coming in and your income likely fluctuates from month to month, so you will be seen as a greater risk in many cases.
So, what are your options?
You could go with a traditional lender. For example, your local bank may give out loans and you may wish to visit the nearest branch. However, given the tougher regulatory environment and your self-employed status, you could be in for a tough battle. This is especially true if you are fairly new to the self-employment ranks, as lenders may not believe that you have established enough of a track-record to qualify for a loan.
You may be the best budgeter in the world and live a very frugal lifestyle. You may have never missed a bill and be very financially sound in general. However, those facts may get lost in the numbers of your credit score and your “Unpredictable” income, as a banker may not be willing (or allowed) to make a reasonable judgment that you will probably pay your loan as planned. It may not make much sense, but that’s the way it often is.
A Title Loan Can Help
A title loan is a loan that is based on the value of your vehicle. As long as you own your vehicle, you will generally qualify for a title loan.
Unlike a traditional loan, a title loan only requires a minimal income verification. It is a much less stringent process than most banks require. So, as long as you can prove that your business is generating some income for you to pay your loan payments with, you should be good to go.
Title loans are also obtained much more quickly than they are at banks. You won’t have to plead with a banker for the “Privilege” of borrowing his money. You’ll walk into the title lender’s office with your title and a small amount of other documentation and generally be out fairly quickly. In fact, Car Cash Loans generally will have you out – with cash – in about 1 hour. Try that at your bank!
Why Would I Qualify for a Title Loan?
You may wonder why you could be turned down for a bank loan and yet qualify for a title loan.
A title loan focuses primarily on 1 factor – that you own a vehicle. If you own a vehicle, you have demonstrated an ability to pay off a large expense already.
Additionally, the lender will have collateral to compensate it should things go wrong, which is an unlikely situation. Only 4 to 8 percent of vehicles end up being repossessed, so the risk of losing your vehicle is very minimal. To be clear, you won’t have to give up your vehicle in most cases, as lenders generally accept just the title as collateral.
Will a Title Loan Work For Me?
A title loan can be an excellent alternative for a self-employed individual such as you. The requirements of getting a title loan are much more customer-friendly than those of traditional lenders. Besides, if you are in the market for a loan, you are likely confident that you can pay it back. You probably just don’t want to deal with an unreasonable banker who will ask you to jump through hoops to qualify – if you qualify at all.