Getting a car loan when you are self employed

If you have a business where you employee yourself, whether as a contractor or a sole trader, it can be hard to get loans. This can be particularly tricky where you need a car to get to work. Here are some options to get car financing if you cannot provide regular payslips to get a traditional car loan

Try a low document loan (often called 'lo-doc' loans)

There are a range of loans that require less documentation that are designed for people with intermittent income. Rather than payslips you can provide evidence of your income over the last few years and evidence of your ability to save through a growing balance in a savings account that you have used to gather a deposit for the loan. These loans may have a slightly higher interest rate but can be a great option for people with inconsistent income. 

Try other sorts of finance

If you have access to other forms of financing, such as extending a mortgage with a generous limit this can also be a good idea. You can also consider buying a car on a credit card and transferring the balance to a new card on a low interest rate transfer deal. This can allow you to purchase the car at a lower interest rate and can be a great idea, particularly if you are expecting some large payments and can pay of the car loan fairly rapidly and aren't looking at a particularly expensive type of car.

Get a guarantor

If you need a car but are just starting out as a freelancer or in a role with intermittent income it may be necessary to get a guarantor. This can be anyone who is willing to help out with payments if you are not able to make payments. Often parents or your spouse can step in as a guarantor and this can help to ensure that you have a car in your own name, which can be important for some jobs. If you need a car for work you may even be able to get your boss to guarantor the loan, as they can dock your pay if you miss payments. 

If you do not have a consistent income or traditional job, you can still get a car loan through a variety of paths. It can be worthing sitting down with a car loan specialist and discussing your specific situation to see which option might be best for you. 

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