How to qualify for a personal loan without steady income?

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More than 15% of Canadians are self employed and do not have predictable steady income which decreases the chances of qualifying for personal loans.  Fortunately there is a solution for those who are GIG workers or rely on seasonal income.   Find competitive loan rates and product offers targeted to Gig workers by clicking on the banner below:

The second strategy is to use a loan broker that can  find a competitive loan offer which best suits your needs.  Try Loanconnect, Canada’s search engine for personal loans. You can get pre-approved for up to $50,000 in 5 minutes.

What strategies can help you qualify for loans faster?

In order to qualify for a loan it is important to understand that too much unsecured and high interest debt refrains you from getting more debt, therefore the first thing to do is to educate yourself about debt and understand why do we need debt and how you can optimize your debt “allowance”

Why do we need debt?

As we spend more than we earn in order to keep up with our expenses we incur in debt.

Can we live without debt?  The answer is can we spend less than we earn? If we could spend less than we earn we would not need debt, however our society is very expensive and on average we can’t afford our standard of living.  

Is debt good?

To a certain extend it is, as things rise in prices with time, the earlier you acquire your fixed assets the better, however when you can’t pay debt fast interests accrue and the debt burden becomes larger, heavier and impossible to pay.

The solution:

In reality, the long term solution is to spend less than you earn and have that disposable income to pay off high interest debt first in order to free your “debt allowance”.  The following are 50 ideas that could help you reduce high interest and unsecured debt.  The goal is not to decrease your lifestyle but adjusting to a more sustainable way of living while saving towards the future.

50 ideas that could help you reduce high interest and unsecured debt:

  1. Try to buy something you want but don’t really need when you have the money to do so.
  2. Pay with cash rather than credit. When you apply this technique you will find that you are more satisfied in the way you purchase because you would end up buying what you really need.  Some studies have shown that people that purchase with credit card tend not to see the real value of money as the actual payment is postpone.  Reduce your stress when opening that monthly statement from the bank.
  3. Pay More Than the Minimum on your credit cards and debt products
  4. There are some balances that will take forever to pay off because of higher rates however is you make an effort to pay as much as possible towards these items first, you could reduce the debt interest. Higher interest debt is technically a money drain for any budget.
  5. Avoid purchasing new cars and leases on new cars
  6. Buy a used car to save money so you can pay off your debt faster.  An average new $38,000 car will lose about $23,000 of value in the first four years you own it because of depreciation.  Amaizing.  The money you save can help you get out of debt much faster.  However if you buy a new car you should keep it at least 16 years in order so that the first initial expense makes sense to your budget.  In other words a 23,000 dollars new car would likely be equivalent to a 80 dollar monthly lease for the life of the 16 years, however if you were to lease the newest model every 3 years your monthly car lease would increase significantly to an average of 600 dollars hurting your budget dramatically. Also if you have 2 cars in the family, try to adjust to only one car you would save 12,000 a year on car expenses which can significantly help your budget.
  7. Get a Second Job or Start a business on the side: Some people have found that starting a job or a business in something you are passionate about would help you increase your income while enjoy life on a systematic way.  Start by something small and devote regularly, some people have even found that this strategic help them develop a retirement plan while still on their first job.
  8. Get a Consolidation Loan or Refinance Your Mortgage: Getting a debt consolidation loan or a mortgage refinancing stratagy will allow you to save on debt interest.  However make sure you limit your spending and use the interest savings to pay off debt balances. This startegy will only help if you create a budget that keeps you from building up new debt while you’re paying off the consolidation loan and mortgage.
  9. Use the following eco – friendly and healthier habits: Conserve water, do laundry during off-peak hours (after 7pm and on weekends), do your own painting, learn to do simple repairs, switch to energy-efficient light bulbs (i.e., LEDs), lights on only when necessary, unplug electronics when not in use, turn heat/air conditioning down when no one is home, make your own cleaning supplies, renovate old furniture instead of buying new, check out garage sales, give up all unnecessary telephone services, switch to a cheaper cellphone service provider and/or plan, communicate with relatives/friends via free Apps and services, use free Apps to make long distance calls, only carry replacement value insurance on home, equip house with storm windows/doors, re-caulk windows/doors and add weatherstripping, cut down on take out and dining out, do more cooking, cook only as much as will be eaten, unless it can be part of another meal, use leftovers in soups and casseroles, preserve food when feasible, store products in the freezer to prevent spoilage, meal prep for the week, pack a lunch ($10/day saves $50/week, $120/month, $2,400/year!), use coupons for items you regularly buy, shop no name brands, make nutritious meals, have regular check-ups, develop healthy habits, exercise regularly (e.g. walks, jog, yoga at home, etc.), follow safety rules to prevent accidents, carry only one health and accident insurance, ttop using tobacco, alcohol and/or addictive drugs, investigate free services offered by the health department, eliminate cable TV, take vacations at home, host potlucks with friends and family, use public parks and picnic areas, attend local sporting events instead of more expensive pro sports, cut children’s hair yourself, make your own hair care products, moisturizers and scrubs, select cosmetics that are reasonably priced, carry only pocket change needed for transit fare and small items, set reasonable amounts for children’s allowances, open a savings account with a no-fee financial institution, set up automatic/automated savings through bank or credit union, save bonus income and tax returns, keep your loose change for savings, use payroll deductions for savings, set up an emergency fund, determine your saving goals, make saving a family affair, be willing to compromise, alter your spending habits, put your budget on a diet, drive small cars that cost less to operate, do your own maintenance, car pool, get rid of one car, use public transportation, consider car-sharing service, like Zipcar, consider moving closer to work, share transportation with coworkers, use washable uniforms and clothing, avoid shopping on your lunch break, bike to work, if/when you can, let your boss know you are interested in more training, secure your position by being a valuable employee, check out free online newspapers, use the public library for free courses and materials, like language courses, DVDs, video games, books, etc. , cut out subscription-based content and look for free alternatives, use free WiFi whenever available, comparison shop for internet services and packages, study to improve your qualifications for the job you hold, develop skills to enhance your position, share child care responsibilities with a friend, neighbour or spouse, share child care provider (e.g., nanny) with a neighbour, investigate government or church operated nursery schools that welcome children from low income families, consider daycare costs to determine if the family really profits from two incomes, make gifts instead of buying them, give of your time instead of your money, carefully consider each situation and cut out all the monetary giving that you possibly can, have legal aid evaluate child support payment, reduce pet care expenses by doing your own grooming, consider pet insurance, buy in bulk when regularly used items are on sale, limit food shopping to once a week, avoid buying snacks or “empty calorie” foods, plan menus in advance to avoid impulse buying, clean out fridge, make a grocery list and use it, buy only what you need at the grocery store, take advantage of seasonal specials, especially fresh produce.

This article is an expression of the author’s personal opinions. The Company will not be held liable in any way for the opinions expressed herein.  

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