Personal loans for the self-employed

author-avatar By on April 29, 2021
Personal loans for the self-employed

It’s hard work running your own business, and it can also be harder for business owners to get a personal loan.

The old adage is If you’re starting out a business you typically won’t turn a profit for two years, so you may need to borrow some cash to get by. According to the Australian Bureau of Statistics, there were approximately 1 million self-employed Australians as of August last year, making up 8.2% of all employment.

If so many of us are self-employed, why then is it harder to get a personal loan? Find out here, as well as what your options are, and how to improve your chances of approval for a self-employed personal loan.

In the market for a personal loan? The table below features personal loans with some of the lowest interest rates on the market.

Advertised rate Comparison rate Monthly repayment Interest TypeSecured TypeEarly Withdrawal FeeOngoing FeeApplication FeeTotal RepaymentEarly RepaymentInstant ApprovalOnline Application

FixedUnsecuredN/AN/AMore details

No Fee Personal Loan

  • No security required
  • Can apply online
  • Fast time to funding

No Fee Personal Loan

  • No security required
  • Can apply online
  • Fast time to funding
FixedUnsecuredN/AN/AMore details

Unsecured Personal Loan (Excellent Credit) (Amount > $5000)

  • No ongoing fees
  • Flexible repayment options
  • No security required

Unsecured Personal Loan (Excellent Credit) (Amount > $5000)

  • No ongoing fees
  • Flexible repayment options
  • No security required
FixedUnsecuredN/AMore details
  • No ongoing fees
  • No application fees
  • Apply online
FixedUnsecuredN/AMore details

Liberty Personal Loan (Very Good Credit History)

Rates based on a loan of $30,000 for a five-year loan term. *Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate, Rates correct as of October 27, 2021. View disclaimer.

What is a self-employed personal loan?

A self-employed personal loan is a personal loan specifically designed for sole traders or the self-employed. The loan itself functions essentially the same as a regular personal loan but the application process is slightly different. This is because self-employed people often don’t have the paperwork regular employees might have, like payslips, which many lenders require when deciding on your loan approval.

When shopping around for loans, check each lender's lending criteria to make sure you qualify or talk to one of their lending specialists prior to applying. If you think you may need a professional to assist you, consider seeking out a specialist broker who can point you in the right direction. One of the most important things you can do to increase your chances of getting approved for a loan is being diligent with your paperwork and finances. Lenders will likely need to see at least two years of tax statements, as well as any sources of revenue and earnings you have, savings, assets, and losses.

What types of personal loans can the self-employed get?

There is a range of personal loan options available to the self-employed. Keep in mind, different lenders will have different lending criteria, so you may have to shop around to find the type of loan you’re after. The types of loans typically available to the self-employed include:

  • Standard personal loans: Provided you qualify, a self-employed person may be able to borrow with a standard personal loan, which can be secured or unsecured. A secured loan means the borrower provides security for the loan through an asset they own, like a car, house, or cash deposit. An unsecured loan on the other hand has no security, which is a higher risk for the lender, and typically results in a higher interest rate.

  • Specialist loans: By going to a specialist broker or lender, you may be able to take advantage of a personal loan specifically set up for self-employed people. These types of loans are often referred to as ‘personal loans for ABN holders’ and can be specialised depending on your field of work.

  • Peer-to-peer (P2P) loans: P2P lending is an unsecured loan you borrow from another group or a ‘peer’. One person applies for credit while on the other side, investors pool their money through a platform which is then lent out.

  • Low-doc loans: Low-doc is a shortened version of low documentation. These types of loans are often targeted at the self-employed, as these groups often don’t have the extensive documentation lenders require. However, due to carrying a higher risk to the lender, interest rates are often higher than with regular loans and come with more fees.

Low doc loans and even no doc loans are also available for car loans and home loans.

How to apply for a self-employed personal loan

Prior to applying for a self-employed personal loan, it’s a good idea to ensure you have all the necessary paperwork a lender may require. Each lender will be different but it’s likely they’ll require most of the following:

  • Two years of your personal and/or company tax returns.

  • At least six months of financial statements from your business showing your profits and/or losses.

  • Recent bank statements showing any outstanding debts you or the business has.

  • Proof of any rental income you have accrued.

  • Personal identification like a driver's license or passport.

  • Your ABN and company’s address.

  • A Notice of Assessment from the Australian Tax Office (ATO) for the last two years.

Once you’ve got the above, the application process for a self-employed personal loan will typically be as follows:

  1. See what types of loans are available to you from a range of lenders, and ensure you’re getting a loan suitable for your needs with a competitive interest rate and low fees. Consider talking to a lending specialist or a specialist broker.

  2. Apply for the loan, submitting all required documentation and any necessary supporting paperwork.

  3. Wait for approval, which can take anywhere from a few hours to up to a week depending on the lender. Upon approval, look over the contract to ensure everything is as agreed and your interest rate isn’t too high.

  4. Sign off on the loan and wait for the funds to reach your account.

Who offers self-employed personal loans?

A wide range of banks and lenders currently offer personal loans for self-employed people, including all of the big four banks ANZ, Commonwealth Bank, NAB, and Westpac. Additionally, there are a number of smaller specialist lenders, like MoneyMe and Plenti.

Lenders often change their terms and conditions as well as their loan products, so check out the lending criteria from each of them to see whether they can lend to you.

How to compare self-employed personal loans

If you’re shopping for a self-employed personal loan, these are some of the things you should be comparing:

The interest rate

Ever one of the most important things to consider when looking for a loan, it’s vital to look at getting the lowest interest rate possible to save yourself on interest costs. Furthermore, find out whether you'll be paying a fixed or variable rate; a fixed rate provides cash flow certainty but often has stricter conditions, while a variable rate could see your interest rate rise, but tends to offer more flexibility.

The fees

Many personal loans come with numerous (and expensive) upfront and ongoing fees, which can negate some of the benefits of a low interest rate. Check the comparison rate to see the true cost of the loan and read the fine print to avoid any nasty surprises, and compare the main personal loan fees and how much they can cost here.

The loan term

Some lenders have shorter loan terms in return for providing less documentation or a fast turnaround time. Make sure you’re getting the loan term you’re after with repayments you can afford. Personal loan terms typically max out at around five to seven years, but there are a select few that can go for longer.

The lender

It’s harder for self-employed people to get personal loans, and some less than reputable lenders can prey on this. Payday loans in particular can be trouble for people seeking short-term finance. Read reviews for your proposed lender, consider how the customer service has been and think about getting financial advice where possible.

The loan security

Depending on the type of loan you get, some lenders may require you to put up security for the loan. This may or may not appeal to you depending on your situation, so find out whether it’s necessary prior to applying.

The lending criteria

Some lenders simply won’t lend to self-employed people. Save yourself time and effort and prevent your credit rating from taking a potential hit by checking whether you’re eligible before applying.

The processing time

If you’re after quick cash, then remember some lenders will have a longer turnaround time than others when assessing your application. You can ask the lender how long it typically takes them to process loans before applying.

Alternatives to self-employed personal loans

If you can’t get a self-employed personal loan or they simply don’t appeal to you, you can also consider taking out a guarantor personal loan. A guarantor personal loan is backed by another person, usually a family member, who will step in to make repayments on the loan should you no longer be able to.

This added security means less risk for the lender, which will make them more likely to approve you.’s two cents

It’s not easy going it alone in business and lenders often don’t make it easier to access credit. One of the best ways to improve your chances of approval is having the relevant documentation and being disciplined in your finances before hitting the apply button.

Prior to borrowing the money, make sure you plan for dips in profit or earnings. Your loan repayments will be steady for the duration of the loan, but your income might not, so make sure you have a plan in that eventuality.

Photo by Tim Mossholder on Unsplash


The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and

Some providers' products may not be available in all states.

In the interests of full disclosure,, Performance Drive and are part of the Firstmac Group. To read about how manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $30,000 loan over 5 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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Alex joined as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.


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