For freelancers, it is very difficult to define financial stability. For many banking systems they are next to unemployed, often they are treated at per with them. In case of emergency, there are very limited resources to borrow from or take supportive help. Often they need a higher collateral to loan against.
Being a freelancer is appealing. Working on chosen terms and getting paid for what you like and are good at is always the dream. But the challenges faced by freelancers are huge. Second, they do not have financial collaterals to offer to clients if such conditions arise. And while applying for a loan their applications stand on the same point as loans for unemployed are treated.
For freelancers, it is very difficult to define financial stability. For many banking systems they are next to unemployed, often they are treated at per with them. In case of emergency, there are very limited resources to borrow from or take supportive help. Often they need a higher collateral to loan against.
A bank loan for unemployed or a freelancer much tougher today; nowadays, banks strictly rely on credit history before granting money to an individual. The least banks look out for while approving a loan, is the annual tax paid or similar financial instruments to ensure their regular income, which a freelancer often struggles to produce.
There are certain circumstances in which the banks relax their norms for a candidate, for not having a credit history.
It is a breather for freelancers and self-employed professionals to know that there are various provisions to get a loan without having a credit history. Apart from banks, there are many NBFCs who also have option of loans for unemployed. Applying to these institutions online or offline is a good option.
These institutes have a modern way of lending money. They exempt some conditions and provide personal loans, car loans, and even home loans. Sometimes, the institutes also offer loans against collaterals like gold, or even electronic gadgets. Due to the leniency, the interest rate of these institutes is little on the higher side when compared to the banks.
But if you trust only traditional borrowing and want to get any long term or short term loans from banks, here`s a series of tips that you need to know to create your credit history:
1. Buy credit card: When you use your credit card for your daily buying, you are borrowing money from the bank. Using credit card frequently and following the timeline of repayments, gives you a good credit rating. Next time you get a call from banks, pay attention and buy that credit card they`ve been trying to sell you.
2. Become a co-applicant: While applying for a loan, you can ask a person with a good credit history to apply for you. This will help you increase your chances of getting loans. You can also apply as a co-applicant with a person who is borrowing money from the bank. This will help you improve your credit history and increase the probability of you getting loans in future.
If a freelancer is wary of all the ways he or she can get loans, getting the desired amount of loan at the desired rate of interest doesn`t require magic. It needs only some financial discipline.
Short term loans
https://www.cashfloat.co.uk/short-term-loans/
Improve your credit history
https://www.wikihow.com/Establish-Credit-History
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