Menu Close

5 Tips on How to Get a Loan for Freelancers

First and foremost, let me congratulate you for having the courage to get out of that 9-5 job and opening yourself up to the wonderful world of freelancing.
But now that you’re one of us, you should know that it’s not all rainbows and butterflies from now on. Unfortunately, you also have to deal with stricter guidelines in case you need to borrow money.
Lenders can afford to be choosy when it comes to shelling out cash for someone like us. Why? Well it’s kind of obvious, isn’t it? For one, you are no longer employed. This means that you have no security of tenure. Your income solely depends on you getting that contract, that gig, or that “raket”. Maybe it’s steady, maybe it’s for a whole year, but they don’t really know that. You don’t either. So that means, if they lend you money, how sure are they that you are able to pay them back?
But don’t fret. This doesn’t mean that it would be impossible for a freelancer to get a loan. It’s just a bit harder, that’s all. And lucky for you, I have prepared some tips for you to get that much-needed loan.
Tip #1: Register your Business
If you’re just starting out, don’t forget to register your business with the Bureau of Internal Revenue. This is a lot of work but at the end of the day, this will make your freelance work legit.
Tip #2: Be diligent in doing your paperwork
Registering your business is not the only thing you need to do. You must now be prepared to properly pay and file your taxes on time. The yearly Income Tax Return will be your biggest proof that you earn enough for a loan, so this is definitely necessary.
Tip #3: Choose the perfect Lender for your Loan
Different banks have different terms and conditions for the various types of loans that they offer. You should know what loan you’re applying for and do your own research on which lender will likely approve your loan. Fair warning though, do not get yourself a loan that you haven’t absolutely understood. Or else, you’re setting yourself up for financial ruin.
Tip #4: Be honest with your Application
This goes without saying that you should not in any circumstance lie on your loan application. If they don’t find out, then no harm done, yeah. But if they do, you may never get the chance to get approved for a loan. Ever.
Tip #5: Be patient
Most banks don’t simply approve a loan for someone who is just starting off as a freelancer. Usually, it takes about 2-3 years of steady income before a freelancer can actually be allowed to borrow money. So don’t feel too bad and just build your credit score until such a time that you can be eligible for a loan, even if you’re a freelancer.

Leave a Reply

Your email address will not be published. Required fields are marked *