More people than ever are choosing to work for themselves and with the current COVID-19 pandemic still disrupting our daily lives, self-employment is on the rise. For a lot of people, being self-employed is great! You can be your own boss and have more flexibility in terms of working hours and workload! But what if you want to apply for funding? Does your employment status affect your chances of getting funding?
It is a common misconception that as a self-employed person it is really difficult to be accepted for a loan or finance. However, there are a few ways you can increase your chances of getting approval. You may be wondering how you will be seen by a potential lender and how your employment affects your chances. There are a few ways you can increase your chances of getting a permit!
Check your credit card.
The first thing you should do before applying for any loan or financing is to check your credit record. Your creditworthiness isn’t the only factor that will help you get approval. However, better credit can increase your chances of getting approval and benefit from lower interest rates as well. However, if you are applying for auto finance with bad credit, options may also be available to you. When checking your credit records, be sure to look for errors and inaccuracies and look for fraudulent activity. If you see something that is incorrect or a financial claim that was not submitted by you, you can contact the credit bureau that provided your credit report.
Register on the electoral roll.
If you live in the UK and are not on the electoral roll, why not? Even if you don’t want to vote in the UK elections, you don’t have to. However, the election list can help establish your identity. Potential lenders use the electoral roll to verify that you are who you say you are and to verify your home address. Some lenders prefer people who don’t move around that much so it can really benefit you.
Proof of income.
When applying for a loan such as self-employed auto finance, lenders take advantage of affordability to get your approval and usually ask for bank statements to prove your income. If you are self-employed, it can be difficult to prove your income if you are paid cash or if your income varies frequently. However, you can improve your chances of getting approval by depositing the money you receive in cash into a UK bank account that you can use to prove your affordability. Lenders prefer to see evidence than just hearsay, so depositing the money can be a great way to prove it. You can deposit the money and then take it out right away if you need to.
Save for a deposit.
You don’t have to put thousands on a loan, but a small deposit can be very beneficial. Even just saving a few months for a down payment before applying for funding can, in many cases, help get you approved. When you have more cash to finance, you don’t have to borrow as much for the lender and can work for you cheaply in the lender’s eyes. It also means you benefit from lower monthly payments and less interest in the long run.