The short version
- Self-employed people can get personal loans, but need to prove income differently.
- Most lenders want one to two years of tax returns or BAS.
- A clean credit history and low other debts help.
Can you get a loan when self-employed?
Yes. Running your own business can make income less steady and harder to prove, so the difference is in the paperwork. Lenders usually want two years of tax returns or business financials, and some ask for a minimum time trading under your ABN.
If you've only recently gone out on your own, a secured loan or a lender with flexible criteria may be easier to get.
Types of loans
- Standard personal loans, where you show income with tax returns instead of payslips. Many banks accept freelancers and contractors this way.
- Secured loans, using a car or other asset as security, which are often easier to get and have lower rates.
- Loans from online and marketplace lenders, which may assess your bank statements directly and decide quickly. Rates can be higher and terms shorter.
- Low doc loans from specialist lenders, which accept other proof of income, such as BAS statements, usually at a higher rate.
Pros
- Funds for personal costs, kept separate from the business.
- Set repayments that are easy to plan around.
- Some lenders accept BAS and bank statements instead of tax returns.
Cons
- More paperwork than for a salaried worker.
- Income that rises and falls can lower how much you can borrow.
- Newer businesses have fewer lenders to choose from.
What you'll need
- Proof of identity, such as a driver's licence or passport.
- Proof of address, such as a utility bill or bank statement in your name.
- Two years of personal and business tax returns, or notices of assessment.
- Recent business bank statements or BAS statements.
- Details of any asset you're offering as security.
Alternatives
A personal loan suits a lump sum for something like a car, renovations or a holiday. For smaller amounts or uneven cash flow, consider:
- A credit card. Some banks accept any taxable income for their basic cards.
- An overdraft on your bank account, which you draw on only when you need it.
- Buy now pay later for smaller purchases, which you repay in a few weeks. Check the late fees.
- A business loan, if the money is for the business. Many personal loans can't be used for business purposes.
- Applying with a guarantor, if a lender wants more security than your records can show.
How to apply
Applying for a personal loan when you're self-employed usually takes 15 minutes online. Most lenders give a decision within a day or two, and some within the hour.
- Check your rate first. Many lenders show the rate you'd get with a soft check, which doesn't show as a credit enquiry, before you formally apply.
- Have your details ready. Lenders ask for ID, payslips or tax returns, your spending, and the debts and credit limits you already have.
- Apply to one lender at a time. Each formal application is recorded on your credit report, and several close together can make lenders more cautious.
- Read the contract before you sign. Check the comparison rate, every fee, and what happens if you repay early or miss a repayment.
- Have your last two tax returns, notices of assessment, BAS and recent business bank statements ready.