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Is It Possible for a Contract Employee to Obtain a Personal Loan?

Is It Possible for a Contract Employee to Obtain a Personal Loan

Short-term contract workers are becoming increasingly important in Australia’s largest industries, from construction to information technology, as companies rely on them to complete tasks they don’t have the expertise for in-house.

Australia’s most significant industries, from construction to information technology, are increasingly relying on short-term contract employees to do specific chores that they can’t perform in-house.

If you’re a contract worker or self-employed and don’t have a steady income or regular employer, you might have difficulties obtaining financial services, but you don’t have to forgo them altogether.

You may still be eligible for a personal loan in Australia, regardless of how many hours you work. However, you’ll probably need to submit more information, the approval process will take somewhat longer, and you’ll want to shop around for the best deal.

What documentation do I need to submit?

To apply for an unsecured loan, you must submit similar information to someone in full-time employment with a few additions. These are the following:

  • Proof of income
  • Identity documents
  • Assessment Letter

Lenders have varying criteria, with high street banks often requesting more documentation than online lenders. When you apply, make sure you have all of your papers ready to upload or present in person so that you don’t spend time waiting.

How long will it take to receive a loan?

After you’ve submitted or given your paperwork, your lender will evaluate whether they can provide you with a loan and offer you a personalized rate based on your situation. Because there are more papers to go through by your loan provider for contract employees and self-employed borrowers, this procedure might take somewhat longer.

This takes anywhere from a few days to a few weeks with a regular bank, which isn’t ideal if you need cash right away. Online loans through Harmoney are accepted and funded considerably faster – sometimes the next day – and you’ll generally receive your money in the next few days.

How to Increase Your Chances of Getting Approved

If you’re concerned that your loan application will be denied, there are a few things you may do to improve your chances of being considered:

Improve your credit score

Paying bills on time, limiting spending, and maintaining a low debt-to-income ratio are all ways to improve your credit score. When comprehensive credit history reporting in Australia now shows lenders the good as well as the poor aspects of your financial history, you may improve your score by keeping up with loan payments, credit card expenses, and utility bills. You can boost your credit score by avoiding applying for numerous lines of credit at once.

Obtain a statement from your employer

If you know your employer well, ask if they would be willing to write a letter of recommendation on your behalf. If you’re on good terms with your present or recent employer and are certain to work for them again in the future, ask if they can compose a favourable testimonial that attests to your previous employment and indicates you’d be likely to do so again in the future.

Work for a longer period

You may be able to negotiate a better loan deal if you apply after working for 6 months or longer.

Reduce expenses

If you have several thousand or more saved up, a savings account statement will demonstrate to lenders that you’ll be able to make loan payments even if you’re unemployed for a while.

Apply online

More and more individuals are turning to online lenders and peer-to-peer marketplaces, which are typically more tolerant of alternative sources of revenue than traditional banks, so you’re more likely to be accepted and given excellent loan terms if you apply for a personal loan online.