How to Qualify for an Unsecured Loan as a Gig Economy Worker

The flexibility and freedom of being your own boss is incredibly appealing. And many people are shifting to working in the gig economy to make that a reality.
Gig economy workers are those who choose to do freelance jobs, often working for many different clients, instead of a single employer. These types of workers may drive for a ride-sharing platform, tutor students, resell items online or many other kinds of contract roles.
By nature of participating in the gig economy, income is diverse, and it isn’t always consistent or guaranteed. But that doesn’t mean that gig economy workers can’t qualify for unsecured loans.
What is an unsecured loan?
Unsecured personal loans, also referred to as personal loans, are not tied to collateral like homes or cars. Since there is no security for the lender, personal loans are typically offered for less money at higher interest rates than a secured loan. Without having collateral as security, lenders may use a borrower’s income or credit score to gauge creditworthiness and ability to repay a loan.
What do I need to qualify for an unsecured loan?
Requirements for an unsecured loan vary per lender. But most commonly, they request to see proof of income, which could be most recent pay stub, bank statement or tax statements.
For individuals who are employed full-time and receive a W-2 at the end of the year, they can often times provide that information to lenders as proof of income.
There is a different set of information you’ll need to pull together to qualify as a self-employed individual with multiple income sources. They may request to see your tax statements, which may include 1099 forms from each of your clients or your tax return from the prior year. You may also be able to use a bank statement or record of client payments.
Tips for gig economy workers to qualify for a loan
Proving income, especially if your work is inconsistent or if you’re new to the gig economy, can be a challenge. To increase your chances of being approved, consider the following tips.
Gig economy workers are a group that’s continuing to grow rapidly year over year. And that means lender flexibility for loans will adapt over time. For now, having a handle of all of your income sources and being able to provide your financial details to lenders gives you the best chance of qualifying for an unsecured loan.
Notice: Information provided in this article is for informational purposes only. Consult your financial advisor about your financial circumstances.
Source: iQuanti, Inc.