Can I get a personal loan if I am self-employed?

Are you one of the growing number of Australians who are self-employed or work as a contractor? If you’re looking for a personal loan, you might have to jump through a few more hoops. But don’t lose heart. Even without a history of stable employment, there are many options to help you make your big idea come to life, faster.

Before you apply for a personal loan, ask yourself these questions:

  • Can you show evidence of a stable income for the past two years?
  • Does your income exceed the minimum income criteria? To be eligible for a Plenti personal loan, you must be able to prove that you earn over $25,000 per year.
  • Can you provide proof of savings? If lenders can see that you’re capable of setting aside money for loan repayments, they’re more likely to view you as a trustworthy borrower.

Improve your chances

If you’re able to show evidence of a stable income over the past two years, your potential lender will then examine your credit score, savings, expenses and other debts to determine whether you have the ability to make repayments. Check out these 3 things you can do to improve your chances of qualifying for a personal loan:

  • Select a less expensive purchase so you can borrow a smaller amount
  • Save for a deposit so you can borrow a smaller amount
  • Check and improve your credit score

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you’re a trustworthy borrower. 

If you have a low credit score, you could be stung with higher interest rates so it may be worth working on improving your score before you buy. You can do this by:

  • Paying your rent, mortgage and utility bills on time
  • Making credit card repayments on time and paying more than the minimum repayment
  • Lowering your credit card limit
  • Limiting how many applications you make for credit 

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a car loan and securing a competitive interest rate. 

Know your Plan B

If you’re not approved for a personal loan, there are other options available. You could apply for a secured personal loan. With a secured personal loan, the lender uses something that you purchase, or another item, as security against the loan. This means if you cannot make repayments down the track, the lender can repossess the item to cover the costs of the loan.

Alternatively, you could apply for a guarantor personal loan, where you have a family member or friend co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Having a guarantor on your personal loan might improve your chances of being approved because your guarantor acts as a type of security, making it less risky for your lender to loan you the funds.

You might also be able to secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan.

Low doc personal loan

If you don’t earn a regular income or you know you’ll find it tough to produce documents proving two years’ worth of stable income, a low doc personal loan could be a good option for you.

As the name suggests, lenders who offer low doc personal loans ask for less documentation than is usually required. The downside? Low doc personal loans often come with higher interest rates because they are considered riskier for the lender.

Before applying, it’s a good idea to use a personal loan calculator to find out how much you’d be expected to repay each month and how much you can reasonably afford to borrow.

Do you qualify?

Tick off the list to see if you meet the criteria for a low doc personal loan:

  • Australian permanent resident (some visa holders are also permitted)
  • Over the age of 18
  • Earn at least $25,000 per year
  • Hold a valid driver licence (provisional or full)
  • Hold an ABN if self-employed


When you’re comparing low doc personal loans, make sure you understand the loan features, including:

  • Interest rates: Is the rate fixed or variable?
  • Hidden fees: Does the loan have upfront and ongoing service fees, or charges for making additional repayments down the track? 
  • The loan amount and terms: Personal loans generally range from $3000 to $100,000, to be prepaid over a period of one to seven years. 
  • Loan restrictions: Low doc loans often have stricter lending criteria. For example, you may not be allowed to make additional repayments to repay the loan more quickly. Make sure the loan offers the flexibility to suit your situation. 

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