If you’re self-employed or currently unemployed, we understand that managing your finances could be proving more challenging right now, particularly when you’re not receiving a regular weekly or monthly salary. Securing financial support in the form of payday loans, loans for self-employed or loans for unemployed might be an option you’ve been considering, but if your research ends up leaving you more confused than clear-minded, let us make things easier for you. Our overview, whether your income is fluctuating or at a standstill, will help you figure out the choices available to you.
Working as a freelancer, entrepreneur, or contractor can come with all sorts of potential benefits, from choosing your own hours to having more flexibility around childcare, for example. However, it can also bring unpredictability when it comes to your finances. Perhaps a client doesn’t settle an invoice on time, or a company you work for goes bust. You might have a big expense to pay for that suddenly uses up all your savings, or work might simply dry up for longer than expected.
It’s during financially testing times such as these when you might consider what credit options are open to you, like credit cards, emergency loans or personal loans for self-employed people. Perhaps your circumstances mean you could be eligible for benefit support but you’re not sure where to start (our free Benefits Finder is a good place to begin – you could tap into unclaimed benefits worth £850 a month*).
You might even wonder if getting a loan is actually possible, or suspect that the process may be more complex - and you wouldn’t be wrong in thinking this.
Eligibility for these types of online loans tends to rest on more extensive criteria than with traditional loans, with lenders requesting evidence of a sustained income and financial stability. Your profit-and-loss statements, tax returns and, sometimes, even your business plan, may be scrutinised to gauge how credit-worthy you are, all of which could take time when you need funds, fast.
*Figures based on 28,876 people who used the benefits checker tool between 22nd September 2022 and 5th November 2023.
In comparison, if you’re currently unemployed and without a steady source of income, a loan might not seem like an obvious option. However, emergency loans for the unemployed in the UK and payday loans for the unemployed do exist and can help provide a financial buffer when your usual earnings stop. However, they can be very expensive, so you should approach them with caution. Likewise, if you’re unemployed with bad credit, lenders will assess the risk of lending you money when you don't have a stable income source or a good credit history. As such, this kind of credit often comes with stringent conditions and higher interest rates, so you should always make sure you can afford to repay your loan and understand any long-term financial implications that come with it.
In the UK, loans and any forms of credit – including Creditspring loans - are only available to people aged 18 or over. Loans for under 18s are not currently legally available.
However, some of the most common search terms by young adults include 'loans for 18-year-olds' and 'loans for 19-year-olds' indicating that this group of individuals may be looking for financial support. If you’re a young adult wanting to start building your credit-worthiness, a loan may provide an opportunity to do this, but your eligibility may likely come under additional scrutiny, or you may need the backing of guarantor – or both. If you’re a little older and have worked for a few years, loans for 20-year-olds and loans for under 21s reflect the evolving financial maturity and responsibilities of individuals in the early stages of their working life. That means you may have built enough borrowing power to be considered an eligible candidate for a loan.
At Creditspring, we prioritise responsible lending and our standard eligibility criteria apply. This includes being a UK resident aged 18 or over, having a stable income and satisfying our affordability and credit checks. It's free to become a Creditspring member and we can help you build your credit, even if you don’t borrow from us.
Your employment status will certainly be very carefully considered by lenders. If you’re unemployed, unfortunately, your loan options will be limited and may come with higher interest rates, because you could be deemed a bigger risk to the lender.
It’s not all doom and gloom, however. If you can show that you can afford to make the repayments for the duration of the loan and pay it off in full using your benefits income, for example, this is a factor that some lenders will review.
If you're self-employed and waiting for your next job to start, on the other hand, you may be asked to show evidence of your income to assess how much you could borrow, if at all.
Again, there are lenders who offer loans for unemployed people with bad credit, though you could be considered a high-risk borrower, if your credit history is poor.
If you’re applying for a loan with Creditspring, we consider more than just your credit score when assessing your loan application - even if you have a less-than-perfect credit rating. We look at a range of factors when assessing your eligibility, keeping in mind your overall financial situation and your ability to repay the loan. You can check your eligibility to see if you qualify in less than 60 seconds.
Not eligible right now? We can still help you! When you sign up as a free member, you’ll gain access to our members-only space packed with smart credit-boosting tips, exclusive partner offers and personalised scores.
If you’re a young adult or a student with a regular income, but little or no credit history (also known as a ‘thin file’ or a ‘skinny file'), you may find that your borrowing options are quite limited. This is because lenders won’t yet be able to see a long record of your borrowing and repayment habits.
This doesn’t necessarily mean you’ll have to wait years to build it up! You may still meet our eligibility criteria for a Creditspring membership as we consider a wide range of factors that go beyond just your credit history.
With so many important considerations, it’s crucial that you fully understand any loan you sign up to, whether you’re self-employed, unemployed or neither. Wondering if it could be more challenging to get a loan without a regular income? The answer is, unfortunately, yes, but here at Creditspring we can help you build some financial resilience with our free membership. Our members-only space is packed with free tools to help you understand your finances better, exclusive offers and our handy Benefits Finder to uncover any benefits you may be entitled to.
Lenders will look at a wide range of factors when it comes to assessing any applicant’s eligibility. If you’re self-employed, a lender can consider how stable your business is, if your income is usually regular and what your credit history is like. If you’re unemployed, lenders may look at alternative income sources, like any benefits you might receive, your credit history and any potential collateral you might have to secure a loan.
It may be possible, though it often means you’ll face higher interest rates, need to show proof of potential income sources (e.g., benefits) and you may be asked to provide a guarantor to step in if you miss any repayments.
If you're self-employed, options such as business loans for self-employed people are designed to support individuals running a business and in need of financial assistance. Personal loans for self-employed people are another option.