Loan Products for Freelancers
Being a freelancer is a commitment to yourself and to a move away from social controls, it is a move away from the traditional work set-up. Not all freelancers begin at the top, and it is hard work and long hours to get there because being an independent employee means having to build your own foundation of trust, success, and relationship to other people (clients). Moreover, being a freelancer does not guarantee financial security because taxes and insurances should also be independently shouldered by the freelancer. In a recent study, it is said that freelancers spend 1 billion hours per week doing remote work but no matter how lucrative the gig economy may appear, many freelancers are still burdened with money concerns as the income in freelancing is inconsistent. Emergencies happen, almost every day for some people. What happens when a freelancer like you needs funds and looks for financial assistance from a bank?
To help you, we separate some options from companies that offer this type of loan:
- Personal Loan
A platform called Credit Ninja has an online request process that allows you to apply for a personal loan from the comfort of your home which means no more long bank forms or slow moving lines. Typically, this is a one business day process, you’ll receive confirmation of the approved funding to help take care of your financial strains. The only limitation here is that you won’t be able to borrow a lot of money because unsecured personal loans tend to max out at around $35,000.
In banking terms, a microloan is a very small loan ranging from $500 to $10,000. These loans are typically paid back in months or less than a year, and installment microloans can be divided into affordable monthly payments.
- Lines of Credit
A line of credit is one financial strategy to tackle large and unpredictable or variable costs. Like a credit card, a business line of credit can be used in any amount up to your predetermined credit limit, and you will accrue interest only on the amount you’ve withdrawn.
- Payday lending
Loans from payday lenders are often difficult to get for freelancers, since they require confirmation of employment and a regular income coming in. If you can prove that you have regular income, by sharing your bank statement, that could help you to get a small loan.
- Collateral Lending
Working with a Pawn Broker and using your mobile phone, laptop, car, motorbike or other collateral for a loan can help to get some emergency money coming in. The risk is that you could lose your collateral if you are not able to repay your loan.