Loans for Contract Workers: Self Employed Persons in Canada
It's not impossible to get a loan in Canada if you're self-employed.
Usually, that just means more documentation is required. Largely, it's so that clear proof comes through about your income. If you had a regular employer you'd get paychecks and the like; since you employ yourself, you need to prove how consistent your pay is and for how much.
Now that you’re self-employed, you might have to put in some extra time, but you can do it. Getting along has to be approached much like they are able to be self-employed. It's entirely possible for the chances of being approved to improve.
Self-Employed Loans
Trying to find cash for covering a large or unexpected expense? Your best option is easily a personal loan. However, for convenience and easier approval, a payday loan might be something you're looking into. A payday loan is generally not recommended by experts for a number of reasons.
Self-Employed Personal Loans
Personal loans don't really come with any complications. Interest is compounded and compounded again over decades until the balance is paid in full. Monthly payments are applied to the interest rate, reducing it, and the rest of the money that is available is applied to paying off the principal balance. They can be used for whatever expenses you have.
Here are key advantages of taking on a personal loan:
Affordable Installment Payments - Personal loans are generally more affordable since they can be paid back in monthly installments. In that sense, they become way more preferable than payday loans. In some circumstances, this even makes them more ideal than credit cards.
Cash Is Readily Available - If you need the money quickly, taking on a personal loan affords convenient access to cash.
Versatility - There are no limits to personal loans. They can be used for pretty much any purpose, which helps a self-employed person considerably. Self-employed people tend to have volatile incomes; personal loan can be modified to suit any financial situation.
Documents Needed
For most lenders, there are certain requirements that all individuals applying for a mortgage must meet. Here is what all self-employed individuals need to provide:
Bank statements Company details ID issued by the government Proof of address Proof of income
Increase Chances to Qualify When Self-Employed
There are several ways that you can bump up your chances of qualifying for a loan even if you're self-employed. Some of the most popular ones include:
Get someone to cosign with you - Having a cosigner will increase your chances of approval because they will accept the loan if you default.
Go with a private lender - If you have needed a loan for some time but have been unable to receive one from a traditional lending institution, you may have success if you work with a private lender.
Pick a secured loan instead of an unsecured loan - Lenders like collateral because if you end up defaulting, they could use the property they have to cover the money you owe.
THE BOTTOM LINE
Self-employed people in Canada should be able to get loans like anyone else. The biggest difference lies in paperwork and being able to prove the ability to pay despite being self-employed. Documents needed usually include proof of income, an ID issued by the government, and bank statements.
Do you want to learn more about mortgage financing in Canada? Level Up Mortgages supports homebuyers and homeowners in attaining success in their mortgage journey with mortgage strategy, digital mortgage education, and introductions to all the other experts you need to succeed in home buying and your personal finance. To assist homebuyers and homeowners in purchasing or refinancing new homes, we work with premier banks and best-rate mortgage lenders in British Columbia and Ontario. Get in touch with us today!
See what you qualify for or contact Paul to get your pre-approval.
Paul Davidescu (www.levelupmortgages.com)
Level Up Mortgages
604-809-3188
paul(at)levelupmortgages.com
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