How can Self-Employed People Apply for a Home Renovation Loan?

On top of all the discrimination you might face in everyday life as a self-employed person, handling paperwork in institutes like banks, lending companies, and government establishments can be incredibly intimidating and daunting. 

However, the times are indeed a-changing. According to a report by the World Bank, around 16.6% of Australians are now leaning towards self-employment. 

But, coming back to paperwork and lending companies, there are still uncertainties when getting a personal loan for renovation as a self-employed person. 

If you are self-employed and planning to apply for a renovation loan, then you are at the right place.

Are Self-Employed People Eligible to Get Home Renovation Loans?

Whether you are a business owner, an entrepreneur, or anyone with a job and a steady income, you can apply for a home renovation loan without second thoughts. All you have to do is make sure you can afford the monthly payments and check all the necessary documents.

Usually, conventional renovation loans or full doc loans will require you to submit various documents like bank statements, proof of tax returns, profit statements, and more. And, this may be a problem if you have newly begun your journey in self-employment.

So, if you are a rookie, you can instead go for an alternate option known as low doc or alt doc home loan. In this plan, you can submit a few documents as per the lender’s requirement and submit proof of employment in a business activity statement (BAS).

Some of the different documents that are required for full doc and alt doc home loans are:

• Full Doc Home Loans – Two years’ worth of tax returns, bank, and financial statements.

• Alt Doc Home Loans – Bank statements, Income declaration (self-certified/ accountant), Australian Business Number (ABN), GST details, Business activity statements (BAS).

Ways to Get Approval for Renovation Loans as Self-Employed

Apart from the issues you might face in repaying the personal loan for renovation, certain hindrances may crop up during the application process. Unfortunately, if your home loan is rejected time and again, it might affect your credit score and your chance of getting a loan through other lenders. 

You must work closely with the lenders during the process and get your paperwork straight to increase your chances of moving your application forward. 

Other than this, what are the different ways to expedite the application process?

• Identify a reliable lender and speak to them early about your requirement.
• Get all your documents and paperwork in order.
• Keep track of your business and personal spending pattern.
• Collect the tax reports.
• Be clear about the details in your bank statement.

These documents will be a solid addition to your profile as they will give the lender an optimistic view of your employment. If all the documents are legit, then it suggests that you have excellent expertise in the business area with a steady income. Therefore, you can be reliable when it comes to repayment. 

If you are self-employed and are hesitant to get a personal loan for renovation, it is time you look past the conventional barriers in the lending market. With good paperwork, a steady income, and a good credit score, getting a renovation loan while you are self-employed is indeed easy.