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How to Apply for a Personal Loan if You’re Self-Employed
Be prepared with past tax returns, bank statements and other documents that prove your income.
Nicole Dow is a lead writer and content strategist on NerdWallet’s personal lending team. She specializes in guiding borrowers through the ins and outs of getting and managing a personal loan. Nicole has been writing about personal finance since 2017. Her work has been featured in The Penny Hoarder and Yahoo Finance. She has a bachelor’s degree in journalism from Hampton University and is based in Tampa Bay, Florida.
Credit Cards and Personal Loans Expert; Travel Expert
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Sara Rathner is a credit cards and travel expert at NerdWallet. She's appeared on the "Today" show, "NBC Nightly News" and CNBC's "Nightly Business Report" and has been quoted in The New York Times, Yahoo Finance, Time, Reuters, NBC News, Business Insider and MarketWatch. Before joining NerdWallet, Sara worked at The Motley Fool for nearly 10 years. She also worked as a freelance personal finance writer and paraplanner and has a bachelor's degree in journalism from Northwestern University. Twitter: @sarakrathner.
Kim Lowe leads the personal loans and student loans editorial teams. She joined NerdWallet after 15 years managing content for MSN.com, including travel, health and food. She started her career as a writer for publications that covered the mortgage, supermarket and restaurant industries. Kim earned a bachelor's degree in journalism from the University of Iowa and a Master of Business Administration from the University of Washington.
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Qualifying for a personal loan can be a bit complicated if you’re self-employed. Lenders may ask for documents proving your income, which typically means providing W-2s. If you’re self-employed, you don’t have W-2s.
Still, applying for a personal loan if you’re self-employed is possible. You’ll just need to have different documents ready to send if the lender asks for them.
How to get a personal loan as a self-employed borrower
Being self-employed doesn’t have much impact on the process of applying for a personal loan. What’s different is the documents you’ll submit to prove you earn enough income to repay the loan.
A personal loan application typically requires:
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.
Some lenders allow you to pre-qualify for a personal loan, meaning you can see your potential loan rate and terms without a hard credit inquiry. That can spare you a temporary ding to your credit score while you weigh your options.
These are common documents used to prove your self-employment income:
Federal tax returns for the past two years, including all schedules.
1099s for the past two years.
Bank statements.
Profit and loss statements, if you run your own business.
Not all lenders ask for proof of income, but it pays to be prepared, especially if you make money from more than one source, like contract or freelance work for multiple clients.
Other forms of income lenders accept
Lenders often consider other sources of regular income such as:
Retirement income.
Alimony.
Child support.
Rental income.
Social Security benefits.
Disability benefits.
Include all your income sources on a loan application to increase your likelihood of approval.
NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices.
NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices.
NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices.
NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices.
NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices.
Self-employed individuals can find themselves at a disadvantage if they can’t show lenders sufficient proof of income.
Sometimes, this is because income can fluctuate when you work for yourself, which means your recent bank statements may not be representative of your annual income. Claiming many business expenses can also lower your taxable income, which may be a barrier to qualifying for a personal loan.
If you can’t prove that your income is high enough to qualify for a personal loan, consider adding a co-signer or putting down collateral to strengthen your loan application.
Co-signed loans
Adding a co-signer can boost a personal loan application, because it provides the lender with an additional person who’s legally obligated to repay the loan if you’re not able to make payments.
Choose a co-signer with stable income, a low debt-to-income ratio and a high credit score. A co-signer with a strong financial profile may even help you get a lower annual percentage rate than if you tried to get the loan on your own.
Not all lenders allow co-signers, but some offer joint loans where both individuals get access to the money and are responsible for making payments.
Some lenders offer secured loans, which requires the borrower to pledge something of value that they own — usually a car or savings account — as collateral. You may have a better chance of qualifying for a secured loan than an unsecured one, because lenders know they can take the collateral if you stop making loan payments.
If you run your own business, you might qualify for a small business loan, small business grant or business credit card — even if you're a solopreneur. Keep in mind that business loans can usually only be used for business purposes.
There is no application process to get a cash advance from your credit card, so no proof of income will be required to borrow up to a few thousand dollars. However, credit card cash advances may come with cash advance fees and bank or ATM fees. APRs on cash advances are also typically higher than the rate you’d pay on credit card purchases.
Home equity financing
If you’re a homeowner, you might be able to borrow against your home’s equity, which is its value minus what you owe on the mortgage. It can be easier to qualify for a home equity loan or home equity line of credit, because your home serves as collateral. However, the lender could foreclose on your home if you don’t make payments on time.
Though it may be uncomfortable to ask people you know for money, a loan from a family member or friend can be a quick, low-cost borrowing option that doesn’t require proof of income. Make sure both parties agree to a repayment plan, put it in writing, and get it signed and notarized.
Can I get a personal loan if I’m self-employed with no proof of income? Can I get a personal loan if I’m self-employed with no proof of income?
You’re unlikely to qualify for a personal loan without any proof of income, because most lenders consider income when determining a borrower’s ability to repay a loan. You may want to try an alternative borrowing method, like a credit card cash advance or a family loan.
Can I get a personal loan if I’m self-employed with bad credit? Can I get a personal loan if I’m self-employed with bad credit?
Having bad credit (a score from 300 to the high 500s) won’t necessarily prevent you from getting a loan, but you may have a smaller pool of lenders to choose from. Consider credit unions, which tend to have looser lending requirements for members, or online lenders that provide loans for bad-credit borrowers. Keep in mind that your loan will likely come with a higher APR.
Methodology
How we chose the best personal loans
Our team of consumer lending experts follow an objective and robust methodology to rate lenders and pick the best.
30+
Lenders reviewed
We review over 35 lenders, including major banks, top credit unions, leading digital platforms, and high interest installment lenders operating across multiple states.
25+
Categories assessed
Each lender is evaluated across five weighted categories and 27 subcategories, covering affordability, eligibility, consumer experience, flexibility, and application process.
60+
Data points analyzed
Our team tracks and reassesses hundreds of data points annually, including APR ranges, fees, credit requirements, and borrower tools, ensuring up to date, accurate comparisons.
Star rating categories
We evaluate more categories than competitors and carefully weigh how each factor impacts your experience.
Affordability25%
We review lenders’ annual percentage rate offerings and the competitiveness of each lenders’ APR range. We also assess whether a lender charges an origination fee and any opportunity for borrowers to receive a rate discount.
Customer experience20%
We consider the experience of the consumer trying to manage a personal loan, which means accessibility of customer service representatives, whether borrowers can choose and change their payment due date, and the ability to track their loan on a mobile app.
Underwriting and eligibility20%
We consider the rigorousness of each lender’s underwriting practices and how widely available their loans are. This category includes whether a lender does a hard credit check before providing a loan, the range of credit profiles they accept and how many states their loans are offered in.
Loan flexibility20%
We assess how flexible lenders can be with borrowers, including whether they offer multiple loan types, personal loan amounts and repayment term options and whether they offer direct payment to creditors on debt consolidation loans.
Application process15%
We consider the lender’s full application process, including a borrower’s ability to preview their loan offer via pre-qualification, whether basic loan information such as APR range and repayment terms are available and easy to find online and how quickly a loan can be funded after approval.
5.0
Overall score
NerdWallet’s review process evaluates and rates personal loan products from more than 30 financial technology companies and financial institutions. We collect over 60 data points and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.
NerdWallet writers are subject matter authorities who use primary,
trustworthy sources to inform their work, including peer-reviewed
studies, government websites, academic research and interviews with
industry experts. All content is fact-checked for accuracy, timeliness
and relevance. You can learn more about NerdWallet's high
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