With so many more people becoming self employed the high street lenders have started to offer loans to the self employed and will offer these loans based on a number of acceptance criteria.
The acceptance criteria for some lenders can be very flexible in that the applicant can self-certify their income. This is where they have to totally rely or trust what the applicant is telling them about their income.
If a self-employed individual does not have proof of income, his or her credit history should be enough to qualify him or her for self-cert loans. If the self employed individual has a negative credit history, however, self certification loans may not be his or her best option.
Most loans that are essentially riskier for the bank or financial institution like self cert loans will not offer the lowest interest rates on the market. Although self-cert loans are a lifeline to many legitimate people there are a small number of borrowers that take advantage by lying about their income.
Due to the potential risk to the lender, self cert loans generally carry a higher rate of interest, but many lenders offers deals where the interest rate drops after an initial period because you have proved to the lender that you are able to keep up with repayments.
The self-cert market is very broker-dominated: although several big lenders sell these loans, they don't always offer them direct. Expect to pay for the services of a broker but this is money well spent, as they will be able to find you the best range of self-cert deals on the market.
Additionally, some applicants of self-certification loans can hire an accountant or financial planner to provide the financial institution with a professional verification of estimated annual income.
Conclusion A self-cert loan can help you get the money you need for whatever purpose. But you should also consider that as a self employed person you may find your income changes every month i.e. it can down as well as up. So when looking at how much to borrow you should always try and ensure you can make the repayments based on this variable income.
Once you decide to take out the loan then make sure and consult a good broker or account to help you find a self-cert loan as it will be money well spend in that it could help you save £1,000's over the term of the loan by them helping you find the best self-cert loan which may not be advertised in normal media.