How To Get A Payday Loan If You Are Self-Employed

21 January 2016
 Categories: Finance & Money, Articles


Payday loans are known for being an easy way for people to borrow money for a couple weeks, and then pay it back when they receive their next paycheck. This system works great for people who receive regular paychecks, but what about a person who is self-employed? Many self-employed individuals do not take regular paychecks from their businesses. Instead, they often take withdrawals of cash when they need money. If this is the situation you are in, you may still be able to get approved for a payday loan. Here are several things you should know as you prepare to apply for a payday loan.

Paychecks Are Designed To Prove Income

Payday loans are short-term loans designed to help people make it financially until they get paid again. To prove a person can repay the loan when it is due, the lender will ask to see copies of the person's most recent paystubs. This shows the lender the person has income coming in, and this is usually enough to qualify a person for the loan.

Just because you do not receive a regular paycheck from the business you own and run does not mean you do not have income. Your income is just handled in a different way than a person's income is when he or she works for someone else. Because of this, you may still qualify for a payday loan, but you will have to prove you have income coming in.

The easiest and most common way to do this is by showing copies of your recent bank statements. The lender may want to see the last two statements, or more, to verify that you truly do have a business that is generating cash. You may need to bring in statements from your business account, as well as statements from your personal account. If these accounts show that you have steady income, the lender may view your situation just like they would with a person with a steady paycheck.

If you have been in business for several years, you could also bring in your tax returns from the past few years. This would show that you have an established business, and it would show the profit your business has made over the years.

Make Sure You Meet The Other Requirements

While the amount of money you are approved for is dependent on your income, there are several other conditions you may need to meet to qualify for a payday loan. These include:

  • Age – To get a payday loan, you must typically be at least 18 years old or older.
  • Proof of identity – Every person applying for a loan must prove their identity, and the easiest way to do this is by showing them a valid driver's license.
  • Checking account – You will also typically need to have a checking account to qualify. Many lenders will require borrowers to write a postdated check to pay the loan off, or they will ask borrowers to sign a form that allows them to debit their checking account for the loan balance on a certain date.
  • References – Most lenders also ask for the names of several references. These will only be used if you default on your loan, and they typically must be people you are close to, but that do not live with you.

There are a lot of payday loan lenders around, and many of these companies may offer loans to people who are self-employed. Before you apply for one, you may want to call or visit the company to ask them if they offer loans to people in this situation. If so, you can fill out the application and have an answer within minutes.

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