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Do credit scores matter for self-employed loans?

Man looking up self-employed loans | Financial Information | Tiger Finance

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If you’re wanting to apply for a self-employed loan, but aren’t too sure if your credit score will be good enough, there might be other ways. Low doc loans can sometimes be used in low credit score situations, depending on your lender. These loans often require less documentation compared to others. Another option is a bad credit home loan, which would work if you specifically need your loan for a property.

If you’re looking to find some options for a self-employed loan, look no further. Read on below to find out your options.

What is a self-employed loan?

A self-employed personal loan is a personal loan for people who are sole-traders or run their own business. While there is no specific type of loan called a ‘self-employed loan’, there are several loan options available that are tailored to the self-employed. Loans such as secured or unsecured loans, specialist loans, and low doc loans all cater to those who are self-employed.

In some instances, these loans require significantly less documentation than a standard loan, while being specifically designed for borrowers who do not have access to the usual documents required for a loan.

How does a self-employed loan work?

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A self-employed loan isn’t too different from a regular loan, depending on which type of self-employed loan you choose. Each lender may have different interest rates for their self-employed options, as well as different levels of flexibility. By choosing a self-employed loan with lower documents, it may take less time to approve compared to the time a regular home loan takes.

Do credit scores matter for a self-employed loan?

In most cases, lenders will want someone who applies for a loan to have a good credit score. However, if you don’t, there are ways around it. Some lenders lend specifically to those with bad credit scores, although the terms of the offered loan may be a little different. It’s not impossible to qualify for a self-employed loan with bad credit.

Loan options for bad credit scores

While there may be other loan options available to you, two good possibilities for someone who is self-employed and has bad credit are:

  • Low Doc Loan – If you’re in a bad credit situation but are self-employed, you may be able to apply for a low doc loan. Low document loans are used when the borrower cannot meet the required number of documents needed for another loan. Low doc loans can be taken out using less documentation than what is required for a full documentation loan. Typically, low doc loans are for potential borrowers who are self-employed or small business owners and don’t have access to the documents required to be approved for a traditional mortgage.


  • Bad Credit Home Loans – Bad credit loans may also be a helpful option if you have your own business. Bad credit home loans are mortgages for people who have struggled financially in the past. Designed to help people with bad credit, bad credit home loans are used to fund the purchase of a new property, or in some cases, to renovate an existing home.

Generally, anyone who has any type of bad credit can apply for a bad credit home loan. Each lender will have different eligibility criteria, so it’s a good idea to have a broker help you find the right bad credit loan that you qualify for.

What documents will I need to apply?

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Generally, the eligibility requirements from lender to lender will differ, but in most cases, you’ll be required to have an ABN. Anything else that is required will differ depending on the loan that you apply for. However, you may need:

  • Business Activity Statements – generally, most lenders will need 12 months’ worth of statements. This will help your lender decide whether or not you’re able to afford the loan given your turnover.
  • Self-verified income declaration- instead of tax statements and other identification, you may need to sign a statement verifying that you earn the amount you say that you earn.
  • A letter from your accountant – while being similar to the signed income declaration mentioned above, your lender might also require an income form signed by your accountant as an added form of proof.
  • Previous bank statements – depending on which lender you choose, they may want to see statements from your business bank account. These could be for as far back as six months, or longer.
  • An explanation for bad credit – Some lenders may require a written statement explaining your credit situation, and how you got into it.

Where does Tiger Finance come in?

With Tiger Finance, we can help to get you a loan in four easy steps. You will have a free consultation with one of our specialists, and we will tailor-make you a loan. We will negotiate with lenders on your behalf before you are approved.

We have helped countless Australians with both good and bad credit ratings to get funding. We understand that lending criteria from other lenders are too strict and can stop you from achieving your goals. That is wrong, and it should not hold you back.

How we can help

Our finance specialists can help you find the right loan for your project. Getting a loan with bad credit can be complicated, but we will find a loan that makes the process that much easier.

If you are one of the many Australians finding getting a loan difficult, Tiger Finance can make the process simple and pain-free. Call our loan specialists today for your free initial consultation. 

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