Personal Loans for Self-Employed

If you’re an entrepreneur, you may have given up on finding a personal loan for self-employed people. Lenders tend to focus on things like paycheck stubs and a steady income. But personal loans for the self-employed with no proof of income do exist, and if you have a steady income you’ll probably qualify for one.

We’ve reviewed the best self-employed personal loans and brought you our top recommendations, using our proprietary SimpleScore methodology to evaluate each lender’s rates, terms, customer satisfaction, customer support and fees.

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Answer a few questions to see which personal loans you pre-qualify for. It’s quick and easy, and it will not impact your credit score.

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    In this article

      The 5 best personal loans for the self-employed

      • Best for Good Credit: SoFi
      • Best for Autopay Discounts: Citibank
      • Best for Customer Satisfaction: Marcus
      • Best for Bad Credit: NetCredit
      • Best for Credit Card Debt Consolidation: Discover

      Best personal loans for the self-employed at a glance

      LenderAPR rangeLoan termMin. loanMax loanSimpleScore
      SoFi5.99%–18.28%24 to 83 months$5,000$100,0004.6/5
      Citibank7.99%–17.99%12 to 60 months$2,000$50,0004.2/5
      Marcus6.99%–19.99%36 to 72 months$5,000$40,0005/5
      NetCredit34%–155%6 to 60 months$1,500$10,0002/5
      Discover6.99%–24.99%36 to 84 months$2,500$35,0004.4/5

      *Data accurate as of November, 2020

      Best for good credit – SoFi

      High loan limits and low rates are the prizes SoFi offers to self-employed people who maintain good credit.

      APR Range
      5.99%–18.28%
      Loan Amount
      $5K–$100K
      Term
      24–84 months
      SimpleScore
      4.6 / 5.0
      close
      SimpleScore SoFi 4.6
      Rates 5
      Loan Size 5
      Customer Satisfaction 3
      Support 5
      Fees 5

      If your business or freelance work produces a steady, verifiable income and you have a good credit score, you could borrow as much as $100,000 from SoFi at outstanding rates. The prequalification process is simple, and SoFi charges no origination fee, prepayment fees or late fees. You’ll need a credit rating of at least 680 to qualify, but if you’re near the bottom of that range, SoFi’s 18.28% rate is very competitive.

      SoFi Disclosure

      Fixed rates from 5.99% APR to 18.28% APR (with AutoPay). SoFi rate ranges are current as of October 5, 2020 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

      Best for autopay discounts – Citibank

      If you’re the type of person who’s always reaching out for their phone to check what day it is, Citibank’s autopay plan is exactly what you need.

      APR Range
      7.99%–17.99%
      Loan Amount
      $2K–$30K
      Term
      12–60 months
      SimpleScore
      4 / 5.0
      close
      SimpleScore Citibank 4
      Rates 5
      Loan Size 4
      Customer Satisfaction 3
      Support 4
      Fees 4

      One way to get a personal loan for self-employed folks is to have a relationship with the bank already. Citibank’s income threshold for existing customers to qualify for personal loans is just $10,500. You’ll need a FICO score of at least 680, and your income will impact the loan amount you are eligible for. Citibank offers an attractive 0.25% APR discount when you sign up for autopay. There are no origination or prepayment fees, but Citibank does not offer prequalification, so you’ll have a hard credit pull on your record if you apply.

      Best for customer satisfaction – Marcus by Goldman Sachs

      The Marcus lending experience is transparent, fee-free and full of little perks that turn customers into besties for life.

      APR Range
      6.99%–19.99%
      Loan Amount
      $3.5K–$40K
      Term
      36–72 months
      SimpleScore
      5 / 5.0
      close
      SimpleScore Marcus by Goldman Sachs 5
      Rates 5
      Loan Size 5
      Customer Satisfaction 5
      Support 5
      Fees 5

      Marcus scores high on customer satisfaction because it treats its borrowers like friends. The bank doesn’t charge origination or prepayment fees — it doesn’t even charge late fees. Bank policy lets you skip one payment after you’ve made all your payments for a year, and you can change your payment date if you need to. The application process is user-friendly, too. If your credit score is below 660, however, you’ll need to find a different lender.

      Marcus by Goldman Sachs Disclosure

      Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. The availability of a loan offer and the terms of your actual offer will vary due to a number of factors, including your loan purpose and our evaluation of your creditworthiness. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans). Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions.

      Best for bad credit – NetCredit

       If you’re a low-score borrower who really must take on high-interest debt, NetCredit has your back.

      APR Range
      34%–155%
      Loan Amount
      $1K–$10K
      Term
      6–60 months
      SimpleScore
      2.3 / 5.0
      close
      SimpleScore NetCredit 2.3
      Rates 1
      Loan Size 2
      Customer Satisfaction N/A
      Support 3
      Fees 3

      Anyone with bad credit who needs an instant personal loan, self-employed or not, has a friend in NetCredit. It takes on customers with scores as low as 550, and the rates are a significant improvement over the predatory payday and title loans ordinarily available to those borrowers. NetCredit offers clearer communication and a more transparent loan process than most bad-credit lenders, too. Still, it’s better to avoid rates like these unless your need for funding is genuinely critical.

      Best for credit card debt consolidation – Discover, Member FDIC

      Discover will send money directly to your creditors for you, so you don’t hesitate to do it for the millionth time.

      APR Range
      6.99%–24.99%
      Loan Amount
      $2,500–$35K
      Term
      36–84 months
      SimpleScore
      4.4 / 5.0
      close
      SimpleScore Discover, Member FDIC 4.4
      Rates 5
      Loan Size 5
      Customer Satisfaction 3
      Support 5
      Fees 4

      Discover’s personal loans are a gem among self-employed personal loans. The criteria include an annual income of $25,000 and a credit score of 660, which are achievable goals for starting off as a freelancer. If you’re looking for a loan to consolidate debt, Discover makes it super easy by offering to directly pay your creditors. If your credit score is below 660, NetCredit might be a better fit for you.

      What is a personal loan?

      Personal loans are unsecured loans used for big purchases, home improvements, or paying off medical bills. People often use personal loans to consolidate high-interest debt like credit cards or payday loans. A personal loan gives the borrower a lower interest rate, a single monthly payment, and a definite time limit for clearing the debt.

      Since personal loans aren’t usually secured by a real estate deed or car title, the lender evaluates the risk by looking at your credit score, income, and debt load. Lower-risk borrowers qualify for higher loan amounts and lower interest rates than those who are considered high-risk.

      How personal loans for self-employed work

      Lenders for self-employed personal loans will look at your credit history and debt load, just like any other borrower. To confirm your income, you’ll need to provide some documentation. Tax forms that show your self-employment income are nearly always accepted; conservative lenders might want to see more than one year of returns, so they know your income is consistent. Nontraditional lenders will sometimes accept creative documentation, like bank statements that show your cash flow over a period of several months.

      You could have your funds as early as the same day from some lenders. You’ll start making payments the following month and continue until the balance is paid.

      If your lender doesn’t have a prepayment penalty, you can pay the loan off at any time, which could save you a bundle on interest expense.

      Check Your Personal Loan Rates

      Answer a few questions to see which personal loans you pre-qualify for. It’s quick and easy, and it will not impact your credit score.

      Get Started

      with our trusted partners at Bankrate.com

      APR

      Interest rates vary from one lender to another, so it’s worth your time to shop around. The APR — or annual percentage rate — will tell you that the rate you’re looking at includes all the costs associated with the loan, including fees. When you’re comparing two lenders, make sure you’re looking at both APRs.

      APRs for personal loans range from below 6% for borrowers with excellent credit to 400% for high-risk customers taking out payday loans.

      Loan amount

      The best personal loans for self-employed customers typically come in amounts ranging from $1,000 to $50,000. There are a few lenders who make loans of as little as $500 or as much as $100,000.

      The amount you’ll be offered will depend on your credit history, debt load, and verifiable income.

      Your odds of being approved for the loan are much higher if you request a smaller loan amount. Smaller loan amounts also give you lower monthly payments.

      Terms

      Most personal loans for self-employed people have terms of two to five years, with a few lenders offering longer or shorter terms for particular circumstances.

      You’ll be able to choose the term of your loan. Your payment will be lower if you select a longer term, but your total interest expense will go up.

      You can calculate the total cost or the loan by multiplying the payment times the term. You might be surprised when you see how much the interest adds up over a longer term.

      How to choose the best small personal for you

      1. Decide how much money you need to borrow.
      2. Calculate the monthly payment you can afford.
      3. Use free online resources to get an estimate of your FICO score.
      4. Think about any loan features that are especially important for you. Do you need a quick decision and fast cash? Would you like to be able to set up automatic payments?
      5. Review the lenders on this page to see which ones are the best fit for your needs and credit score.
      6. Read the full reviews of the lenders that seem like a good match for you.
      7. Approach your first-choice lender and see if you pass the prequalification process.
      8. If you qualify, and like the interest rate and terms you’re offered, complete the full application.
      9. If your first-choice lender declines your loan request, it will tell you why. Study that information and use it to select a second lender to approach.

      Getting a loan with bad credit when you’re self-employed

      Since the COVID-19 outbreak and social distancing, self-employment numbers have exploded. In fact, nearly 30% – or 44 million – Americans are self-employed.

      If you’re one of the many self-employed individuals that have lost jobs or have trouble finding adequate work to pay the bills, you may yourself defaulting on loans and in financial trouble. Unfortunately, your credit has probably also suffered. For this reason, banks and credit unions may feel you are a credit risk and may hesitate to qualify you for a loan.

      Thankfully, there are many online alternative lenders who will lend to self-employed individuals with fair or bad credit. Your interest rates may be higher, amounts lower, and you may have shorter terms, but if you need funds, there are options to consider.

      [ Read: How to Get a Personal Loan with Fair Credit ]

      Personal loan alternatives

      If you’ve been turned down for a personal loan — or are just weary about taking on new or more debt — there are alternatives to consider if and when you need the funds.

      • Open a savings account and put away a portion of every paycheck going forward. Even a small amount each month can add up over time.
      • Have a garage sale, sell items online or over the internet. You might be surprised how much you can get for an item you no longer need. Books and games sell like wildfire on Facebook Marketplace or eBay.
      • Ask a relative to co-sign for a loan, get a “back on track loan” or credit-builder loan. Each of these alternatives has pros and cons, but if you need the funds, the advantages might outweigh any negatives.
      • Apply for a state or federal grant. You can research and apply online.
      • In your spare time (assuming you have spare time), consider driving for Uber or Lyft.
      • Walk dogs or babysit after hours.

      Keep in mind that there are advantages –like making a little quick cash – and disadvantages with each of these options. You need a reliable car and clean driving record to drive for Uber or Lyft, applying for a grant takes time, you may not have spare time to take on another side-gig, and selling online requires packaging and mailing items, which also takes time. Even so, if you’re strapped for cash and can’t get (or don’t want) a personal loan, there are alternatives out there.

       [ Related: The Best Installment Loans for Bad Credit ]

      FAQ: Best personal loans for self-employed

      Yes, you can. You’ll need some documentation to prove that you have enough steady income to manage the payments. Your tax form from the last year or two will usually do the trick. Other than documenting your income, the loan process for self-employed is the same as for anyone else.

      Several banks offer personal loans that work well for self-employed people in different situations. Some of the best lenders for self-employed customers include Earnest, SoFi, Citibank, Marcus, NetCredit, and Discover. The one that’s best for you will depend on whether you have good or bad credit, how much you want to borrow, and which banking features are most important to you.

      Most lenders will ask to see your tax form from last year, or perhaps the previous two years. If you file taxes quarterly, you can document income with those forms. Some lenders are more flexible about documentation and will accept records of your bank deposits, 1099 forms, and other documents.

      We welcome your feedback on this article and would love to hear about your experience with the personal loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

      Methodology

      SimpleScore

      The SimpleScore is a proprietary scoring metric we use to objectively compare products and services at The Simple Dollar.

      For every review, our editorial team:

      • Identifies five measurable aspects to compare across each brand
      • Determines the rating criteria for each aspect score
      • Averages the five aspect scores to produce a single SimpleScore

      Here’s a breakdown of the five aspect scores and their rating criteria for our review of the best personal loans of 2020.

      Why do some brands have different SimpleScores on different pages?

      To ensure the SimpleScore is as helpful and accurate as possible, we developed unique criteria for every category we compare at The Simple Dollar. Since most brands offer a variety of financial solutions, their products and services will score differently depending on what we’re scoring on a given page.

      However, it’s also possible for the same product from the same brand to have multiple SimpleScores. For instance, if we compare NetCredit’s personal loans according to our criteria for the best personal loans, it scores a 2.3 out of 5. But when we compare NetCredit according to the criteria for the best bad credit personal loans, it scores considerably higher, since the criteria for the latter review are more lenient (lenders who serve borrowers with bad credit will always offer higher rates, so we needed to adjust our category methodology to account for different industry standards).

      Questions about our methodology?

      Email Hayley Armstrong at hayley@thesimpledollar.com.

      Rates

      We looked at the maximum APR for each lender — the lower their maximum rate, the higher their score.

      Loan Size

      We awarded higher scores to lenders with more generous loan sizes.

      Customer Satisfaction

      We leveraged the J.D. Power 2019 Personal Loan Satisfaction Study℠ to see how customers rated their experience with each lender. (If a lender wasn’t included in J.D. Power’s study, we skipped this aspect and averaged the four remaining aspect scores.)

      Support

      We awarded higher scores to lenders with the most channels for customer support.

      Fees

      We looked at the three most common fees — origination, late payment, and pre-payment — and penalized lenders for each fee charged.

      Lauren Haas

      Contributing Writer

      Lauren Haas is a freelance writer who covers personal finance, health, and business topics. She’s a serial entrepreneur who enjoys travel, dance, and yoga.

      Reviewed by

      • Courtney Mihocik
        Courtney Mihocik
        Editor

        Courtney Mihocik is an editor at The Simple Dollar who specializes in insurance, personal finance, and loans. Previously, she wrote and edited for Interest.com, PersonalLoans.org, Ballantyne Magazine, Thread Magazine, The Post, ACRN, The New Political, Columbus Alive and the Institute for International Journalism.