How to Get a Personal Loan When You’re Self-Employed in 2024

It’s still possible to get a personal loan when you’re self-employed; it just requires some extra work on your part.

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Updated May 13, 2024
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When you’re self-employed, you reap the rewards of your own labor. You get to enjoy perks like setting your own schedule, taking a vacation when it’s convenient for you, and working where you like.

When you work hard and are successful, you — and not some boss — get to enjoy higher earnings. According to ZipRecruiter, the national average salary for self-employed professionals is $82,151. That’s significantly higher than the national average salary for all positions, which is just $58,260.

While working for yourself can be rewarding, there can also be some downsides. It may be difficult to qualify for some types of credit, such as personal loans or personal lines of credit. If you’re looking to finance a major purchase or consolidate a high-interest credit card, you may be surprised by how complicated the process can be. But it's helpful to know how to get a loan when you need it.

Here’s how to find the best personal loans for self-employed professionals.

In this article

Are personal loans an option if you’re self-employed?

When you apply for a personal loan, lenders will typically ask you for proof of income, such as a W-2 or a recent paystub. However, you don’t have those documents if you’re self-employed. But that doesn’t mean you’re out of luck. Many personal loan lenders will still approve you for a loan; you will just have to jump through some extra hoops to prove you’re a reliable borrower.

What’s required to get a personal loan if you’re self-employed?

Generally, you’ll have to provide more information and documentation than you would if you were an employee of a company. That’s because many new businesses fail in their first few years of operation, so freelancers and entrepreneurs pose a bigger risk to lenders. They want to ensure you’re a responsible borrower who will repay the loan, so they’ll ask for extra information.

You’ll usually have to provide:

  • Tax returns from the past two years
  • Recent bank statements
  • 1099 forms from clients

If your business is new or not yet profitable, you may not be able to provide lenders with these documents. If that’s the case, you may still be able to get approved for a loan by adding a co-signer to your application.

A co-signer is a friend or relative with stable employment, regular income, and a good credit score. If you fall behind on your payments, the co-signer will have to make them instead. Having a co-signer lessens the risk to the lender, making them more likely to issue you a loan.

Where to get a personal loan if you’re self-employed

While many lenders will work with self-employed borrowers, three lenders explicitly list instructions for entrepreneurs and freelancers:


SoFi offers personal loans with fixed APR rates ranging from 8.99%-29.99% (as of Mar. 6, 2024) with all discounts.1 Eligible applicants can borrow from $5,000 to $100,000, and there are no origination fees, prepayment penalties, or late fees.

SoFi requires self-employed borrowers to provide documentation proving their income, such as tax returns or bank statements. However, SoFi considers other factors as well. SoFi will also look at your credit history, education, and whether or not you have a co-signer when reviewing your application.

Lending Club

Lending Club allows you to borrow up to $40,000, and the loan process can be completed in as little as four days. There are no prepayment fees, but Lending Club does charge an origination fee; it can range from 1% to 6% of the total loan amount.

If you’re self-employed, you may need to submit a recent tax return or 1099 showing your income from clients. You’ll likely have to fill out Form 4506-T, which gives Lending Club permission to ask the IRS for copies of your tax forms.


With Upgrade, you can borrow $1,000 to $50,000 and have 36 or 60 months to repay the loan. Once approved, you can receive your money in as little as one business day. And, you can check your rate without impacting your credit score.

As a self-employed person, Upgrade will ask you to submit your two most recent tax returns and a recent bank statement that shows relevant income.

What are some alternatives to personal loans if you’re self-employed?

While it’s possible to get a personal loan or personal line of credit when you’re self-employed, it may not be realistic for your situation. If you can’t get a personal loan right now, consider these alternatives instead:

Small business loans

If you’re looking to take out money to expand your business, consider taking out a business loan. With lenders like Kabbage and QuarterSpot, you can get funding in as little as 24 hours, and you can borrow up to $250,000.

To qualify for a business loan, you’ll need to have been in operation for at least one year and have a minimum of $50,000 in annual revenue. Lenders typically require you to have a personal credit score of at least 550.

While online business loan lenders offer you quick access to cash, you should know that they often charge very high interest rates or fees, causing you to repay far more than you originally borrowed.

Credit cards

Another option is to use a personal credit card. If you’re self-employed and have good to excellent credit, you can qualify for a rewards credit card, helping you earn valuable cash back rewards or points whenever you make a purchase. If your business is relatively new, you may not be able to get a business card, but you’ll likely be able to find a personal credit card.

For example, the Chase Freedom Unlimited® has a $0 annual fee, and you’ll earn 5% cash back on travel purchased through Chase Travel, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service and unlimited 1.5% cash back on all other purchases. Plus, it offers 0% intro APR for 15 months on purchases (then 20.49% - 29.24% Variable). If you have a major expense coming up — such as needing a new computer or travel for a conference — you have over a year to pay it off without paying interest fees.

You’ll also get access to a revolving line of credit, meaning you can continually use your card whenever you need financing. That perk is a huge benefit over a personal loan, which is a one-time funding option.

When your business is more established, consider applying for a business credit card to streamline your finances.

Home equity loan

If you own a home, you have another financing option available to you: a home equity loan. With this approach, you borrow against your home’s equity — how much your home is worth minus how much you owe on your mortgage.

A home equity loan is secured by your house, so you’re more likely to get approved for a loan and get a lower interest rate than you would with an unsecured personal loan. You can generally borrow up to 85 percent of your home’s equity.

For example, if you owned a $250,000 home and owed $175,000 on it, your home’s equity would be $75,000. If you took out a home equity loan for 85 percent of your house’s equity, you could borrow up to $63,750.

The bottom line

If you’re planning on making a major purchase or want to consolidate high-interest credit card debt, taking out a personal loan can be a smart idea. But when you’re self-employed, the process can be more involved than if you were a traditional employee.

However, you shouldn’t get discouraged! Many lenders are happy to work with self-employed borrowers, as long as you can provide additional documentation proving your income. If you’re looking for a personal loan for self-employed professionals, check out our list of the best personal loans.

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Author Details

Kat Tretina

Kat Tretina is a personal finance expert focusing on practical financial matters, including student loans, debt repayment, side hustles, insurance, and healthcare. Drawing from her personal experience, she aims to simplify complex financial topics and provide individuals with the information they need to make informed decisions.