Where to Get Secured and Unsecured Loans for Self Employed People

May 23, 2010
Asa Ghaffar

: The Best Loans for Self Employed People - torrio1974

Self-employed people can borrow money for any purpose. Get approval for a low APR unsecured or secured loan with bad, fair, good or excellent credit scores.

Although the lowest interest loans for self-employed people will be offered to those who have an excellent credit score, it remains possible to borrow money with past credit problems. The longer that person has successfully gone it alone, the more positively this will be perceived by lenders. Low APR loans are available with or without collateral from banks, credit unions and pawnbrokers. Whether a secured or unsecured self-employed loan is the right option will depend upon whether the applicant is a homeowner or a tenant, the amount of money needed and past credit history.

Good Credit Loans for the Self Employed

Bank loans. Use a comparison site, such as moneysupermarket.com, to identify low interest rate loan for self-employed people.
Peer-to-peer loans. Sites, such as Prosper.com and Lending Club, act as an intermediary so people can lend money to other people. A great source of self-employed unsecured loan at a low rate of APR.
HELOC loans. This involves borrowing money against a flexible line of credit that is secured on a property. A HELOC loan is very convenient, but default could result in foreclosure.
Credit union loan. Subject to affordability, members are able to get cheap self employed loan and other financial products on affordable terms.
Credit card cash advance. Customers can withdraw a defined percentage of their allocated credit limit from an ATM machine. It's a great way to raise quick cash, but the rate of interest will be higher than it is for a regular purchase. There will also be an administrative fee.

Bad Credit Loans for Self Employed People

Pawnshop loans. A loan from a pawnbroker is secured on an item of value, such as gold or jewellery. The collateral is redeemed by paying back the principal and any interest that has accrued. Failure to repay the debt will lead to the item being sold.
Home loan. Borrow money against the equity that has accrued in a property. The lower default rate, because the family home is put up as collateral, means that the rate of interest is far more affordable than other bad credit self-employed loans.
Payday loans. It may be possible to get a self employed unsecured loan for up to $1,000 from a payday lender, provided that income proof can be provided. Although there is no collateral, interest and charges will continue to accrue if the debt isn't repaid.
Family loans. Rather than turning to a bad credit lender, it may be possible to affordably borrow money from a close family member. Although there are no repercussions for defaulting, it could cause friction between members of the family should this happen.
Auto title loans. It is possible to borrow money against the value of a car, provided that at least 75 percent of all car finance has been paid-off. Vehicle title loans must be settled at the end of the term in order to avoid repossession and sale.

Secured vs Unsecured Self Employed Loans

A self-employed unsecured loan is the preferred option for good credit applicants because creditors have limited legal powers to recover their money in the event of default. However, finance will only be available for bad credit customers for up to $1,000, the maximum borrowing term will normally be limited to about a month and the rate of interest will be very high. The provision of collateral is generally a strategy used by business people to raise extra cash or get creditor approval when poor credit is an issue.