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Is it Possible to get a Loan in South Africa if I'm Self-employed?

Nowadays, more and more people are quitting their jobs to start their own entrepreneur projects. Many work independently and others even found companies. But being self-employed makes you wonder. Am I going to be able to get a loan in South Africa? Of course, you are. Here we will show you how you can get a loan, where, what documents you need, and what are your best options.

How to Get a Personal Loan Online if Self-employed in South Africa?

Personal loans are unsecured loans, that is to say, you don’t need to pledge any asset as a guarantee of payment. So, how do you qualify for it? You qualify on the basis of your income and your credit history. If you have a good monthly income and a clean credit profile, you might be able to get better interest rates, for instance.

There are a great number of companies in South Africa that offer online loans that are great for when you need instant cash. These kinds of online loans are useful for those unfortunate events when you need loans with fast payouts due to an emergency. The nature of the emergency may be varied. Your house needs an urgent repair; your vehicle broke down and you need to have it fixed since you work with it; your child had an accident and must undergo surgery.

No matter the reason for your need of cash, you can access to it thanks to these online loans. Let’s see some of them. When we think of fast loans, we can’t help but think about Konga loans. With this online credit lending company, you can access funds in a matter of minutes. With them, you can take a loan for up to R5 000. Another company that offers online loans is Affordable Loans 4 All. With them, you can borrow bigger amounts of money: they offer both personal and consolidation loans.  

What Kind of Loans can I Find if I am Self-Employed?

Not having to deal with a boss must be one of the first advantages of being self-employed we can think of. Also, the possibility of managing your time the way you want might be another great benefit. However, many entrepreneurs come to us with this same doubt: can I get a loan at a bank? Many credit lending providers have the qualifying criteria of being under permanent employment, Notwithstanding, there are some banks that let you access their loans if you are self-employed as long as you can prove your income. If you do not have proof of income you will not be able to take out a loan in South Africa.

Once the bank knows for sure that you have regular earnings and good credit history, they’ll be ready to serve you with any loan you want. At banks, you can find a greater variety of credit lending products. Most banks in South Africa offer personal loans up to an average of R300 000. You can also get quick loans like the Absa instant loan for short term loans of a maximum of R8 000. Moreover, banks provide home loans for you to build or buy the house you always wanted. Always remember to check with the bank whether they accept your bank statements as proof of your ability to repay the loan. 

What are the Requirements for Asking for a Loan if I’m Self-Employed?

People get may become anxious when thinking about what the bank or credit lender may ask from them. But in truth, it’s not that big a deal. They only want to have some reassurance that they will be reimbursed for the money they lent you. This is why they also run affordability checks on you and review your credit history to see if you are responsible payer, or if you are swamped by unpaid bills.

So far, we’ve been discussing unsecured loans taken out at banks or online creditors. Let’s see what they usually request their clients. Online lenders, such as Konga, Wonga, Loan Expert, and others, tend to have less stringent requirements than banks. However, there are some similarities between them; to take out a loan at any of these institutions you will have to:

  • Be over 18; that is of legal age
  • Be a South African Resident
  • Provide your latest bank statements proving you have a regular income

As we said, banks usually have more detailed requirements. For example, you will have to earn over a certain amount each month, a good credit history, among other criteria.

How to Apply for a Loan if you are Self-employed?

If you want to apply for a loan as self-employed first you need to figure out what you need the money for. Do you want it to buy something you’ve fancied for a long time? You may want to buy yourself the latest home theater, or a new sofa. Well for these purchases you should consider taking out a loan at a bank or an online credit company. However, if you need the money to buy a house or make important upgrades to your house, you should request a home loan.

Once you’ve made up your mind as to the specific loan you need you can start searching for credit lenders. Running a little investigation might be a good idea. Check which company offers you the best interest rate, for instance. Or who gives you the most important benefits.

You know what loan you need, what requirements you have to meet, and you’ve chosen the best provider; it’s time to apply for that loan. Most banks and credit lending institutions have online applications that are really easy to complete. Nevertheless, if you prefer, you can go to the nearest branch and start your application in person: just like old times.

What do I need to Know about Business Loans for Self-Employed People?

Business loans are designed solely for business objectives. If you own a company duly registered with the South African government, then you might qualify for this loan. Within business loans, you will find a great array of options. There are business loans for start-ups, to buy assets like heavy machinery, to buy a property.

Just like we talked about in the case of personal loans, you will also find business loans both at banks and at private credit lending companies. Also, it is important that you clearly know what you need the money for. This might help you take a better decision. If you are unsure as to what loan is best for you, we recommend you to read our articles; you will find valuable information there. You can also contact a finance consultant to give you a hand.

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A key issue you should know about is that in order to qualify for these loans you must provide the bank with your annual financials, bank statements, management accounts, among other information.

3 Matters you should be aware of when Taking out a Bond if Self-Employed

If people are fearful that they might not be able to qualify for a personal loan if they are self-employed, imagine how they get when they think about a home loan. Relax, you can do it. The first thing you need to know is that you can ask for a home loan. However, it will be a little trickier than taking it out as an employee, but it’s not impossible.

Why is it a little trickier? Well, here comes the second issue you should know. You need to prove the bank that you have regular earnings. For this, you will need to have an auditor write a letter to the bank certifying that you have this income. The third thing you should better be aware of is that some banks (not all of them) may ask you to have your tax certificates. So, it might be a good idea that you have them ready at least for the last three years.

Below we will outline the requirements for home loans asked by most credit providers. Remember, though, that each bank or creditor will have their own requirements you will have to comply with.

  • ID (South African)
  • Bank Statements (the last 3 or 6)
  • The offer to purchase (signed)

What are the Best Self-Employed Home Loans?

You’ll have dozens of options when it comes to home loans. It is very important to carefully consider which one is the best alternative since this is a long-term commitment. We’re serious about this; you’ll be repaying your home loan for the next ten to twenty-five years.

According to the South African Customer Satisfaction Index (SAcsi), these are the banks that got the best scores in terms of customer satisfaction:

  • Capitec
  • FNB
  • Nedbank
  • Absa
  • Standard Bank

1 Tip to Find the Best Loans if you are Self-employed Using Loans Calculators

Loan calculators are of great help when we’re looking for loans. If you are self-employed you can also benefit from this tool. After using it, you will know if you can afford the loan or not. Most banks offer their own loan calculators, but how can you easily compare their offer with that made by another credit provider?

Here comes our tip: use our loan calculator. It will show you the best loans available in South Africa. The information you’ll find there is totally unbiased. Moreover, you won’t have to provide any kind of information about yourself.

What are the Requirements for a Car Loan if I am Self-employed?

Probably, being an entrepreneur you are the kind of person who needs a car the most. When you work for yourself you have to run thousands of errands. A car might be your best investment. Time is money, they say. And they’re right. This is especially so when you are self-employed and have to take care of many things at a time.

However, buying a car is not like buying candy; it’s expensive. Luckily, there are several companies in South Africa with excellent car loan solutions. Later on, we will compare the best car loans in our country. For now, let’s see what you need to qualify for a car loan:

  • South African ID
  • Being of legal age
  • Having a valid driver’s license
  • Your latest bank statements (at least the last three)

Keep in view that these are the basic requirements asked by most credit lending companies. There might be other documents you need to submit on the basis of the bank you choose.

Comparison of the 2 most Popular Car Loans for Self-Employed Individuals

The most popular car loans in South Africa are the ones provided by Wesbank and MFC. We wanted to make a comparison between these two providers for you to have a greater idea of what to expect about car loans in South Africa.

Wesbank is a division of the First National Bank while MFC belongs to Nedbank. The first thing these two providers have in common is the fact that they are a part of two of the oldest banks in South Africa. This may be a reason they are the most popular car loans: being so long in the credit market makes them a reliable and trustworthy option.

With both car loans provider, you can either finance a new or an old car from a private seller or a dealer. The main difference is that Wesbank offers vehicle leasing while MFC does not. This can be a great tool if you own a small business and need vehicles, but can’t afford to buy them.

In terms of repayments, they offer similar arrangements. With both providers, you can request to make a balloon payment so that your installments are lower. All in all, whichever you choose, you will have a great client experience since these companies enjoy a well-deserved reputation.

You’ve learned today that being self-employed should not get in the way from you accessing finance. In South Africa, there are plenty of credit providers who offer loans that can easily be taken out by entrepreneurs or people who work on their own. Here we tried to introduce you to the different options you have, the different loans you can apply for, the requirements you will need to meet, and more.

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Questions and answers

What are the office hours?

Weekdays from 8 am to 4:30 pm

Can I apply if I live in Rustenburg?

Will I be charged for the service?

No, you'll pay only the instalments and rate.

What if ive got a joined account at another bank but do have an account at fnb also and i want to start a small business and dont have enough capital can i apply for a loan at fnb?

The first thing you need to do to apply for a FNB loan is to open an account with the banj, which will not take more than 2 days.

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