Loans to self-employed workers 2018
Working on your own is not always synonymous with big earnings. With the economic crisis, in fact, many taxpayers found themselves having to open a VAT number, but nevertheless they have monthly income comparable to that of an employee. This is why we increasingly hear about low-income self-employed loans.
How to get credit in these cases? In general, self-employed workers are required to have more guarantees than those who can claim an employee contract. This happens because the self-employed cannot count on a fixed income.
Not being able to rely on the paycheck, in response to a loan request submitted by an independent bank, the credit institutions refer to the tax return, or to the Single Model, to define the repayment capacity of the applicant.
These are therefore the documents to be submitted when applying. However, it is not said that the presence of an income is sufficient to obtain financing, especially when it comes to loans for self-employed persons with low income.
How to get financing
A loan can also be obtained in the presence of a relatively low income only on condition that the loan has a reduced sum. In fact, for access to credit it is essential that the repayment plan is in line with the applicant’s possibilities.
What does it mean in simple words? For the bank to grant the loan, the amortization installment must not have an excessive impact on the applicant’s monthly income. In principle, banks and financial companies consider one fifth of their monthly income as the maximum limit.
In other words, if the self-employed person who submits the request has monthly income of around one thousand USD, the installment of the loan must not exceed 200 USD.
However, the one just illustrated is only a general rule. So even if the beneficiary’s income is in line with the applicant’s repayment ability, it is not said that he gets the funding.
In fact, in order to protect itself from the risk of insolvency, the credit institution may require the presentation of ancillary guarantees. Hypothesis that includes a wide choice of solutions. They range from signing a guarantor to taking out a home mortgage.
The latter case, however, is to be taken into consideration only if the property in question has a relatively low value, or if the sum you want to request is high. The reason is simple, if the loan value is much lower than that of the house you want to mortgage, you will only be able to access a partial mortgage.
Which could represent an obstacle for the bank in case of non-payment of the installments. This is because it would be difficult for the credit institution to repay the loaned capital if the home mortgage is only partial. The bank is therefore likely to reject the loan application if there is much difference between the loan value and the property.
Loans with guarantor
When it comes to loans for self-employed persons with low income, it is necessary to spend a few words on loans with guarantor. As we have already mentioned, the signature of a guarantor represents one of the most accepted accessory guarantees by banks and financial companies that provide loans to self-employed persons.
However, the selection of the guarantor must be carried out carefully, because choosing the wrong guarantor may result in the rejection of the request. Not only. In this case, the impossibility of requesting a new loan for a certain period of time due to the reporting in the database company databases should also be considered.
But what are the characteristics that the guarantor must have? To fulfill the role of guarantor, it is necessary first of all to have an adequate income for the repayment of the loan. Income that must be proven by means of a paycheck, pension slip, or a single form.
In principle, however, banks and financial institutions prefer that the guarantor be a pensioner or an employee if the beneficiary is an independent person. The aim is obviously to reduce the risk of insolvency as much as possible.
In order for the guarantor to be suitable, it is also necessary that it is not reported in the database company lists as a bad payer, that is, that it has not had problems in repaying past loans. We remind you that pensioners are also accepted as guarantors, but in this case it will be necessary to respect the registry criteria. Criteria that can change from bank to bank.
It should be noted that the guarantor is only expected to intervene in difficult circumstances, that is, if the beneficiary of the loan cannot cope with the payment of one or two installments. For no reason, in fact, the guarantor can permanently replace the holder of the loan.
Loans for self-employed workers reported in database company
Up to now we have seen how to obtain loans for self-employed persons with low income by analyzing the various options for those with a mirrored credit profile. Things change, however, if to apply for funding is a person reported in the database company as a bad payer.
Not being able to count on a paycheck, self-employed workers are considered to be more at risk than employees and pensioners. And obviously the risk of insolvency increases if the subject also had problems in repaying a loan.
In these cases it will be rather difficult to obtain financing, even if there are ancillary guarantees. One of the most used solutions in these cases is represented by loans with exchanges.
These are products characterized by the presence of pre-paid bills that have a protection function towards the credit institution. The main advantage of these products is that they are also accessible to bad payers.
Furthermore, falling into the category of personal loans, they can also extend for very long periods (maximum 120 months). But let’s see in detail how low-income self-employed loans with bills work.
Loans with bills
Changed financing is a form of personal loan that allows bad payers to get the desired money. Its peculiarity, as can be seen from the name, is represented by the fact that the payment of the monthly installments does not take place by debiting an account or postal bulletins, but by using pre- paid bills.
Executive debt securities that the borrower signs when the loan agreement is entered into. These have a dual function since on the one hand they constitute the loan payment method and on the other they have a loan guarantee function.
In case of insolvency, in fact, the bank that has disbursed a loan with bills of exchange can request the attachment of the debtor’s assets. Which will allow the institution to easily repay the money granted, and in a very short time.
By resorting to loans for low-income self-employed workers, the bank will not have to wait long bureaucratic times in the event of insolvency. This is because bills of exchange allow the expropriation of property without the need for a judge’s judgment.
Reason why several banks and financial institutions are willing to grant loans for low-income self-employed workers, even to those who have had problems with an old loan. In fact, bills represent very significant guarantees for credit institutions.
Recall that the loans with bills are not finalized. This means that the beneficiary is not required to justify the request or to explain in any way what the destination of the money will be.
How the refund takes place
As regards repayment and interest rate, falling into the category of personal loans, loans with bills can extend up to 10 years. The rate is fixed and the installments are usually monthly.
Since these are loans for self-employed persons with low income destined for subjects who have had credit problems, the interest rate applied to loans with bills of exchange is usually very high. This is because the bank tends to raise interest to protect itself in high risk financing.
However, loans with bills also have some advantages. First of all, the granting of capital takes place in a very short time. In fact, it is possible to obtain the requested sum even in 24- 48 hours.
Not only. Thanks to the use of bills, it is possible to modify the loan amortization plan according to the needs of the applicant. The latter has in fact the possibility to request the renewal or refinancing of one or more bills.
We also remind you that in order for bills of exchange to be considered valid, they must be in good standing with regard to the payment of stamp duty. Otherwise the executive title cannot be considered as such.
Loans between private individuals 2017
After taking stock of the loans for self-employed persons with low income with mortgage guarantee, guarantor and promissory notes, we move on to a further solution for those who are looking for loans of this type. We are talking about private loans.
Credit lines that are entered into between two private entities without the intermediation of any credit institution.
Provided by Italian law, loans between private individuals are the ideal solution for VAT holders who have difficulty accessing credit through traditional credit access channels.
What do they consist of? It is simply a loan between two people, who can also be relatives or friends. The transaction can be recorded by simple private writing, or resort to the assistance of a notary.
In any case, independent of the solution chosen for the preparation of the loan contact, it is necessary to formalize the loan in order not to run into problems with the taxman. This even if the law does not impose the written form on loan agreements.
As for the actual disbursement of the sum, it can be made either in cash or by bank transfer or check. If the threshold of 3 thousand USD is exceeded, however, it becomes indispensable to use a traceable payment system, such as bank transfer or check.
Our advice is to always use the transfer, as it guarantees the possibility of proving that the transaction has actually taken place. In this case it is advisable to indicate in the causal “loan between individuals”.
The interest rate
Still analyzing the repayment terms applied to loans for self-employed persons with low income between individuals, it is necessary to spend a few words on the interest rate. Loans between individuals can be both onerous and free of charge.
It is up to the two parties to agree on any interest rate. In the case of a loan for consideration, however, it is necessary to specify the size of the rate in the loan agreement.
The only limit to be respected as regards the definition of the interest rate is represented by the anti-usury rate fixed periodically by law. In the event that the rate exceeds this threshold, the loan is to be considered void.
We also remind you that the two parties also have the possibility of agreeing on any default interest, as well as the expected costs in case of early repayment of the loan.
We close our discussion on loans for self-employed people with low income by talking about pawned loans. This is a solution for accessing credit that is now rather dated, but which allows you to obtain liquidity immediately.
Pawn loans provide for the presentation of a valuable asset owned by the beneficiary which constitutes the guarantee of the loan. The sum that can be financed is defined on the basis of the market value of the aforementioned asset, which is subject to an estimate. The repayment requires monthly installments and the interest rate is usually fixed.
Among the various banks and financial companies that provide lien on loans we mention Unicredit. Those interested can go to one of the Unicredit branches authorized to grant this type of product to obtain an immediate estimate of the asset they wish to commit. In the specific case, the lender also takes care of keeping the asset.