Self-employed workers have it more complicated when applying for a personal loan to finance a project, whether it is to renovate the house, pay for higher education or buy a car. In the eyes of banks and finance companies, their employment situation is more unstable than that of an employee and more dependent on external factors such as seasonality. The fact of not having a payroll implies a greater risk of non-payment and a compelling reason to deny any request that comes from a self-employed person as soon as the applicant indicates that circumstance in the application process.
Now, although it is more difficult, there are entities that offer loans to the self-employed in conditions just as attractive as those that an employee can get, with interest below the average of 8% APR established by the Bank of Spain for these products. To achieve this, yes, it will be necessary to demonstrate recurring income for at least two years in a row and a healthy financial situation, guarantees that the money will be returned, they point out from the financial comparator HelpMyCash.com.
But then, which banks and finance companies are willing to incur this caveat? Because, far from it, it is something as common as one would expect.
Requesting a loan from a bank is the quintessential traditional way of requesting external financing. Most banks, such as Bankinter or Banco Santander, do not put excessive barriers to the self-employed to lend them money, always under the condition that they are solvent. This means that the debtor will not be able to allocate more than 35% of their monthly net income to the payment of the installments of the credits that they have in force, including the one that they are going to request. Nor can you accumulate unpaid debt or be registered in delinquent files, such as ASNEF. If these three conditions are not met, the entity will deny the request immediately.
According to HelpMyCash analysts, banks usually offer good interest rates that improve substantially if the applicant is a client of the entity. The main problem is that, in exchange for the competitive price that characterizes their products, they charge opening or study fees and associate payment or life protection insurance that makes the final cost of financing more expensive.
Although this is the generality, there are online banks that offer loans that do not require an extra outlay or hidden expenses. For example, Bank Norwegian and its Personal Loan, with which a self-employed person can request between 500 and 50,000 euros from 5.99% TIN (6.13% APR), to be repaid within a period of up to ten years. It does not associate opening or early repayment commissions or additional products.
Another alternative is the financial credit establishments, which tend to be less strict with the requirements they demand of their loan applicants, without this meaning that they are lax. The self-employed person will also have to demonstrate sufficient and sustained income over time that not only allows him to repay the debt, but also ensures him some room for maneuver to face any unforeseen event.
These financial entities are characterized by trading with good interest, at the level of many banks, but, as a positive fact, they do not require contracting any additional product nor do they usually charge commissions. It is not even necessary to open an account with them because they are entities that do not keep money, they only lend it.
An example of a financial establishment that does grant financing to the self-employed under the conditions described and at a good price is Cofidis. Your Personal Loan has interest from 4.95% NIR (5.06% APR) and allows you to request between 6,000 and 60,000 euros, also to be repaid in up to ten years.
The entities that grant loans in Spain have been preparing for months before the imminent rise in interest rates by the European Central Bank (ECB), scheduled for July 21. According to the latest Survey on Bank Loans by the Bank of Spain, since the beginning of the second quarter of 2022, banks and finance companies have tightened the approval criteria for their loans to protect themselves against the possible consequences that the measure and the economic situation in general may keep in the pockets of the Spaniards.
A tightening that, according to the analysts of the financial comparator, will be reflected in an increase in the denials of applications formalized by the self-employed, much more than it can impact those of other profiles that are assumed to have greater job stability. like officials. That is why they recommend not postponing the decision to apply for funding much longer if the project you want to undertake cannot wait. On the HelpMyCash page, the applicant will find the list of the best personal loans that they can compare to adjust them to their profile and needs.