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How to Apply for a Personal Loan if You’re Self-Employed

Bring previous tax forms, bank accounts, and other proof-of-income records with you.

If you wish to bundle high-interest loans into a single monthly payment or fund a big project like a home improvement, a personal loan might be an alternative. If you're self-employed, though, getting a personal loan may be more difficult. This is because during the application process, the lender can request documentation proving your wages.

W-2s from their employers are needed for certain applicants. You don't get W-2s if you're self-employed. Even then, if you're self-employed, you can always apply for a personal loan. You'll only need to be prepared to submit various papers if the lender requests them.

Information to provide when you first apply for a personal loan

The following information is usually requested on a personal loan application:
  • Personal information including your home contact information, birthdate, Social Security number and citizenship status.
  • Financial information including annual income, income sources, and monthly housing expenses and debt obligations.
  • Employment information including your employment status, current employer and length of time working there.
  • Loan request information including the reason for the loan and the amount you seek to borrow.

Few lenders would let you pre-qualify for a personal loan, which means you can see what loan terms you'd be eligible for without having to submit a hard credit inquiry. This will help you avoid a temporary credit hit while you consider your options.

How to prove self-employment income

The lender will ask for more evidence of the income details you provided while evaluating your loan application. It pays to be prepared in this situation, particularly if you're self-employed.

To show your self-employment revenue, have the following records on hand:
  • Federal tax returns for the past two years, including all schedules, like a Schedule C and Schedule SE.
  • 1099s for the past two years.
  • Bank statements.

These documents are also useful if you earn money from various sources, such as contract or freelance jobs with a variety of clients.