When freelancers need credit, banks often struggle with it. Because similar to the self-employed freelancers have no regular income. At least none that is generated from self-employment. However, such is in most cases required for securing a loan, which is why financing for freelancers is often hardly possible without alternatives off the bank.
What are the options?
The credit market is quite diverse these days, and those who put enough effort into finding a job usually also find funding for freelancers to meet their own financial needs. Freelancers, however, have a heavier level of lending and, consequently, less choice in terms of lending. Banks assume that the self-employed and freelancers will be the first to feel it when the overall economic situation gets out of hand.
To be more specific, freelancers do not have high financial reserves on average in order to bridge a drop in sales so easily. However, this also involves payment defaults, and at the latest here are the banks involved in lending freelancers.
At the same time, the earnings situation does not even have to be bad. Even a high income can not fully convince many bank employees. If you want to save yourself this, you should better start looking for alternatives in order to secure the financing for freelancers in the foreseeable future.
With the personal loan to finance for freelancers
Personal loans are relatively new in terms of lending. Because here you get the longed-for capital, not by banks or credit institutions, but by private individuals. These persons, referred to as investors, are in turn looking for lucrative investment opportunities, but spend only relatively small sums of money. For the applicant, this means facing multiple lenders who finance their project. In turn, investors benefit from flexible risk diversification, which they make on the basis of credit rating figures.
The best-known provider or agent of personal loans in Germany is called creditend. In the course of the registration, data are required here to the same extent as when applying for a normal bank loan. Particular attention is paid to the revenue and expenditure of the applicant. In addition to the income test is also a credit bureuaabfrage instead of, but this does not necessarily mean the end for funding for freelancers. The self-employed and freelancers have only one restriction to fulfill, namely to pursue their profession for at least two years.
The information provided at the time the application is made is used by the system to calculate certain credit ratings which, as mentioned above, will be made available to investors. In principle, the interest rate for which one would like to have his financing for freelancers is freely selectable. However, it also depends on the creditworthiness of the applicant, which ultimately really has to be paid.
High risks are offset by a corresponding risk premium on the interest rate, so that the offer remains attractive for investors. The applicant can then select the loan amount after signing up, with smaller amounts of less than $ 1,000 available to him. As a result, personal loans are also becoming an alternative to expensive disbursements, which on the one hand are more flexible, but on the other hand are two to three times as expensive.
In general, however, it can be said that personal loans are much cheaper than a bank loan. Personal loans are second to none, and freelancers should make the effort, when applying for a grant, to include a purpose that encourages investors to invest in their own project. Clever business ideas increase the chances of a cheap financing for freelancers again.