How to Apply for a Personal Loan when You're self-employed

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How to apply for a Personal Loan when You're self-employed
Prepare yourself with tax returns, bank statements and other documentation that proves your income.


Updated on Sep 21st 2021.

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A could be an option if you want to consolidate your high-interest debts into one installment or finance a big project such as a home remodel. However, getting a personal loan is a little more complicated if you're self-employed. That's because the lender may ask you for documents proving your income in the application process.
For a lot of applicants, that requires submitting W-2s from their employers. If you're self-employed, you don't have W-2s. However, getting personal loan if you're self-employed is feasible. You'll just need to have several documents prepared to hand when the lender requests them.
The information you need to provide when you first make an application for personal loan
A typically will ask for:
Personal information including your contact information for your home birthday date, Social Security number and citizenship status.
Information on financials, such as annual income, income sources and monthly expenses for housing and debt obligations.
Employment information including your employment status, your current employer and length of time working there.
Loan request information including the reason for your loan along with the loan amount that you want to take out.

Certain lenders let you pre-qualify for the personal loan that means you can see what loan conditions you're eligible for without a . It could mean a temporary ding to your credit scores as you weigh your alternatives.
>> MORE:
How can you prove the self-employment income of a self-employed worker?
As the lender evaluates your loan application, it may require additional proof of the income information you shared with them. This is why it's important for you to prepare, especially in the case of self-employment.
You should have these documents available to show the self-employment income you earn:
Federal tax returns for the past two years, including all schedules, .
1099s for the past two years.
Bank statements.

These documents are also useful if your income comes from more than one source, like contract or freelance work with multiple clients.



Author bios: Sara Rathner is a NerdWallet credit and travel expert. She has appeared as a guest on "Today" show, Nasdaq and CNBC's "Nightly Business Report."







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