Payday Loans for Self Employed

If you are self-employed, explore your options and apply online for payday loans through zaving today.

Last updated by Zaving Editorial Team, on January 19th, 2024

Are you looking for self-employed loans? If you need some urgent cash to get you through a tight spot, you can turn to zaving to help you explore your options. Our online service makes applying for a loan quick, easy, and hassle-free. If your loan is approved, cash can land in your bank account straight away – it's as simple as that! Start the application process right here today with zaving.

What are payday loans and how do they work?

Payday loans are short-term loans typically ranging from a few hundred to a thousand dollars, designed to cover emergency expenses until the borrower's next paycheck. They're intended for immediate financial needs and are repaid in full, plus fees, when the borrower receives their next paycheck.

To secure a payday loan, individuals provide proof of income and a post-dated check or access to their bank account for automatic repayment. The process often involves minimal credit checks, making it accessible to individuals with poor credit history.

Upon approval, borrowers receive funds quickly, sometimes within the same day. However, these loans usually come with high fees and interest rates, making them a costly form of borrowing. If borrowers cannot repay the loan on time, they might extend it, incurring additional fees and trapping them in a cycle of debt.

It's essential to use payday loans responsibly and consider alternative options if possible. They can offer immediate relief but may lead to long-term financial difficulties if not managed carefully.

Can I get a payday loan if I'm self-employed?

While it's possible to get a payday loan if you're self-employed, the process may be slightly different than for traditionally employed individuals. 

Here's what you need to know:

Eligibility:

  • Proof of income: You'll need to provide proof of your self-employment income.
 

This can include:

  • Bank statements: Lenders will typically want to see your bank statements for the past 3-6 months to verify your income and ensure you have a regular income flow.
  • Tax returns: Your tax returns from the previous year can also be used to verify your income.
  • Business financial statements: If you have a formal business structure, you may need to provide financial statements for your business.
  • Creditworthiness: Lenders will also check your credit score and history to assess your risk as a borrower. Having a good credit score can improve your chances of approval and qualify you for lower interest rates.
  • Other requirements: Some lenders may have additional requirements, such as a minimum monthly income or a minimum time in business.
 

It’s also important to be aware of the following:

Payday loans for self-employed individuals are typically smaller than those for traditionally employed borrowers. This is because lenders may be less certain of your income stability. You can typically expect to borrow up to $2,000.

  • Interest rates: Payday loans are known for having high interest rates, which can be even higher for self-employed borrowers. Be sure to compare rates from different lenders before you apply.
  • Repayment terms: Payday loans are typically short-term loans, with repayment terms ranging from a few weeks to a few months. The lender will likely set up automatic deductions from your bank account to ensure timely repayment.

What are the pros and cons of payday loans?

Payday loans offer quick access to cash, but they come with several pros and cons to consider:

Pros:
  • Immediate funds: Payday loans provide fast access to cash, often within 24 hours, helping in emergencies or urgent financial needs.
  • Easy application: The application process is simple and usually done online, requiring minimal documentation compared to traditional loans.
  • Accessible with bad credit: Individuals with poor credit scores can still qualify for payday loans, as lenders focus more on income than credit history.
  • No collateral required: Payday loans are unsecured, so you don't need to provide collateral, unlike many other types of loans.

Cons:

  • High fees and interest rates: Payday loans have exorbitant interest rates, often exceeding 400% APR. Combined with fees, the total cost can be significantly higher than the borrowed amount.
  • Short repayment period: Repayment is usually due on the next payday, which can create financial strain, especially if unexpected expenses persist.
  • Debt cycle: Borrowers might get trapped in a cycle of borrowing to cover previous loans, leading to a cycle of debt due to high fees and interest rates.
  • Predatory practices: Some lenders engage in predatory practices, targeting vulnerable individuals with aggressive collection methods and exploitative terms.

More of your frequently asked questions about payday loans

How quickly can I get a payday loan?

Typically, the process of obtaining a payday loan is relatively quick, often providing access to funds within a day or even on the same day of application approval. The speed of receiving a payday loan largely depends on several factors, including the lender's processing time, the completeness of your application, and meeting their eligibility criteria. Generally, applying online and providing accurate information expedites the process, enabling swift approval and disbursal of funds to address immediate financial needs.

Can I apply for multiple payday loans at once?

Applying for multiple payday loans simultaneously is possible, but it can have potential negative impacts on your financial health and creditworthiness. Lenders assess repayment capacity, and having multiple active loan applications can raise concerns about financial stability. Moreover, multiple applications in a short time might trigger scrutiny, leading to rejection or stricter assessment for each loan. It's wise to avoid multiple applications to maintain a positive financial standing.

What do I do if I'm denied a payday loan?

If you're denied a payday loan, it's essential to assess the reasons behind the denial. Lenders typically consider factors such as income, credit history, and existing financial obligations. Reasons for denial could include insufficient income, a poor credit score, or having outstanding payday loans. Check for inaccuracies or incomplete details on your application that might have contributed to the rejection. Importantly, being declined for a payday loan typically doesn't impact your credit score directly since payday lenders often don't report to credit bureaus. Consider improving your financial situation if possible, exploring other loan options, or seeking financial guidance to address your immediate needs without relying on a payday loan.

What if I can't repay my payday loan?

If you're unable to repay a payday loan, it's essential to act promptly and communicate with the lender. Contact them immediately to explain your situation and explore potential alternatives or repayment plans. Ignoring the situation might lead to additional fees, increased interest, or being reported to credit bureaus, affecting your credit score. Some lenders might offer extensions, allowing more time to repay without penalties. Consider seeking financial counseling or assistance to manage the situation effectively and avoid potential long-term financial consequences.