How Easy It Is To Get Loans For Self-Employed In Germany?

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If you are a freelancer or self-employed and in a need of funding, then it is important that you know all your options before going for a loan. At one stage of our life, we all feel a need for debt to accomplish a certain goal that is out of our financial reach.

Well, most of the lenders out there in the market have various loan products that are specifically made by keeping the financial need of the person. However, the majority of these lenders prefer to provide loans to individuals who have a steady source of income, which means in short and simple words that the chances of getting approval for a loan are higher for salaried individuals.

Like the salaried individuals, self-employed people also deserve to get credit when needed. But unfortunately, the word self-employment doesn’t go well into the ears of the most lenders and this is the reason why loan request of self-employed get denied. Moreover, this is not the complete picture as there are lenders in the market who offers loans for self-employed without Schufa where the borrower doesn’t need to have his/her credit checked. Now, let us understand the credit options for the self-employed in a more detailed way.

What kind of loans can be disbursed to self-employed?

If you are a self-employed person, then you must have faced problems in getting debt and thought whether it is possible to get funding for your project or not. Well, to your question- yes, self-employed people can get a loan from banks or any other financial institutes or directly from any lender. Below are the loan products that can be given to self-employed people:

  • Business loans
  • Small loans
  • Remittance loans for small businesses
  • Small loan for craftsmen
  • Loan for the start-ups

Apart from all these, there are other loans products that are ideal for the self-employed and the structure depend on the lender whom you will apply. Every bank and financial institutes have various offering for the self-employed according to the business in which he/she is in. For instance, if you are indulged in a vehicle business, then you can expect a category of an automobile loan. However, in order to get a loan for self-employed, the borrower might be asked to provide a collateral or a proof of income without which chances will be quite slight. Still, there are lenders in the market who can provide credit without schufa experience and without any collateral so that you won’t have to deal worry whether you have done a credit check in your past or not. But, for such loans, you might be asked to provide a

Why collateral is required to get a self-employed? 

Most of the banks and other traditional lenders ask to provide collateral or security when they have a doubt on the borrower’s repayment capacity. Having collateral ensures the lender than if the borrower is unable to repay the loan, then the collateral that will be provided will legally fall into the hands of the lender. Here are the things that that lender might ask to provide collateral:

  • House, land or any real estate property
  • Market shares
  • Car
  • Expensive jewelry or gadgets
  • Equipment used in the office

Where can you get a loan for self-employed?

It is very important for you to know that not all lenders provide loans to self-employed, so you have to search properly for the lender who has such special arrangements. You could check online to find the names of the lender who can provide you with funding for your business project. If somehow, you are not able to get funds for your business project, then you could apply for a personal loan from banks, but even there you have to provide proof of your income. On the other hand, direct lenders in the market are not providing service with full pace and you can even get loans even you don’t have the income proof.

What documents you have to submit to get a self-employed loan?

For self-employed or freelancer, He/she has to provide all the basic requirements like age proof, German bank account, and others. Apart from all these things, you might even be asked to submit your latest income tax assessment notices and a business assessment to the bank and also the proof of the collateral if it is asked from the lender. However, if you are knocking the doors of direct lenders, then you might be asked to provide only the basic documents and nothing else. Wrapping up, there is no denying that getting a loan for self-employed is quite difficult as compared to the person with a steady source of income. Still, there is a possibility and you should definitely give it a try if you need funding.

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