Self Employed Personal Loans

Self employed personal loan tips from our expert

Be prepared

While self-employed personal loans often require different forms of documentation than standard loans, lenders still want to see you’re in a solid financial position. This means having your tax returns, bank statements and a summary of your assets and liabilities ready to go before you apply.

Compare your options

Not every lender caters to self-employed borrowers, so it’s worth doing your homework. Comparing lenders could help you find one that not only accepts your application but also offers a competitive interest rate and loan features that suit your needs.

Your credit score matters more than you think

A strong credit score can go a long way in reassuring lenders of how trustworthy you are as a borrower. With variable income or less documentation, lenders may rely more heavily on your credit history to ensure you’re able to make repayments.

Try to pay down any existing debts, keep on top of your bills, and avoid applying for too many loans at once—it could make you seem a more risky borrower than you actually are. Remember, the higher your credit score, the more likely you are to be offered a sharper rate.

Sally Tindall, Canstar Director of Data Insights

One of Australia’s leading financial and political commentators, Sally Tindall serves as Canstar’s official spokesperson. An advocate for national financial literacy, Sally regularly provides industry commentary and consumer insights within the banking, insurance, energy, and broader financial services industries, empowering Australians to make financially sound choices.

As part of Sally’s financial advocacy, helping Australians feel confident in managing their personal finances—particularly when navigating the alluring world of credit cards, points, and card limits—is a passion of hers. Her expert insights are frequently sought by leading Australian media outlets including The ABC, The Australian, Herald Sun, Sydney Morning Herald, The Australian Financial Review, Herald Sun, ABC, Domain.com.au, realestate.com.au, 9news, and Yahoo! Finance. Sally’s extensive career includes working across all levels of Australian government, notably for the Hon. Julia Gillard, where she contributed to Federal Budgets focused on easing living costs and led communications at multinational finance forums like the G20 and APEC. Follow Sally on LinkedIn.

Personal loans for self-employed people

If you’re self-employed you can still apply for a personal loan but you may have a few extra hurdles to jump over to prove you have sufficient earnings. Potential lenders need to know that you earn enough to be able to repay the loan, as part of their responsible lending obligations.

A person who works for an employer can simply show their regular payslips to prove their earnings, but if you’re self-employed, having the right paperwork to do so can be a challenge. It’s important to note that not all lenders will offer loans to self-employed people so you might need to shop around and compare your options. You can use the table above to compare personal loans for self-employed people from our Online Partners. Self employed personal loans may also be referred to as low doc personal loans.

How do I apply for a personal loan if I’m self-employed?

If a lender does allow self-employed people to apply, then you can usually follow the same process as anyone else would to apply for a personal loan. If you find a suitable option from our Online Partners in the table above, you can press the ‘Go to site’ button to start the process (Canstar may earn a fee in this circumstance).

As part of the application process, a lender will usually ask for details of your self-employed status and earnings. What details they require may vary among lenders so you will need to check with each one you’re considering to see what it counts as a record of your earnings.

For example, CommBank says it will only consider your self-employed income if you’ve been running a business for at least 12 months. It will then need to see your latest personal tax return or a notice of assessment from the Australian Taxation Office (ATO). If neither’s available then your accountant may be able to help show your taxable income.

That’s why it might be a good idea to submit a tax return each year, even if you don’t need to according to the ATO’s criteria, just to make sure you have the relevant paperwork.

Other potential lenders may have different eligibility requirements regarding your proof of earnings so you’d need to check with each to see what they require.

What is a low doc personal loan?

A low doc personal loan is a type of personal loan that requires less documentation to be provided by the borrower. They function in the same way as any other personal loan, being an amount of borrowed money that can help pay for something such as a wedding, holiday, home renovations or to consolidate other forms of debt. Low doc car loans may also be available.

The loan amount, plus any interest and fees, must be paid back over a certain period of time (known as the loan term), which typically ranges from one to seven years. Personal loans can also be either unsecured or secured against an asset.

Low doc personal loans, however, are usually seen as more risky for lenders, so not all lenders will offer them. If they do, they may come with higher fees or interest rates attached and/or different eligibility requirements. Having a good credit score may help when it comes to the interest rates offered on these types of loans.

You can check your credit score for free with Canstar or via the Canstar App.

What other documents do I need to supply for a personal loan if I’m self-employed?

You may be asked to supply a range of documents to show what earnings and expenses you have, such as any mortgage or other loan repayments, income from any other assets you may have such as any savings, term deposits and shares and your business’ income and expenditure. All business related documentation will usually have to show your full name and Australian Business Number (ABN).

Check with your potential lender to see what other documents they may require and how they should be verified and submitted along with your personal loan application.

How can I compare personal loans if I’m self-employed?

You can compare personal loans for self-employed people by using the table above. It shows personal loan options from our Online Partners and can be sorted by interest rate, comparison rate (which takes into account any fees), or by the monthly repayments. You can also further filter your results, such as by provider or by Canstar’s Star Ratings.