What's your monthly income? Are you formally employed? Do you have a contract with the people you work for? Have you registered your business? Those are some of the worst questions I've ever answered from lenders in my quest to get loans as a freelancer.
Yes! I have a monthly income, but it's not constant. Some months I make $1000, others less than $100 and some months I'm not even paid. My freelance employers don't offer contracts by the way because there are hundreds of other workers ready to take the job if I'm not interested.
Most of the lenders out there are not ready to lend money to people like me. They want people who are formally employed or independent contractors with signed contracts assuring them of regular payment. If I call myself a businessperson, they want to know whether I have an operating license from my local authority and whether I have registered my business.
So for a freelancer like me, the best option is to borrow from social lenders. With these, I don't need to spend extra money -like paying for an operating license for a job I do from my living room - just to borrow money.
Different Social Lenders
Peer to peer
There are several types of social lending platforms, each with its own advantages and disadvantages. The first and most popular category is peer lenders. In this case, loans are funded by different people. You just post your loan request on the lenders website and members will fund it bit by bit until you get the total amount you need.
There are obvious benefits like getting the loan without any security, formal employment or even your credit rating being checked. Some disadvantages of using this method to borrow include the time it takes to get the loan – you have to wait for days or weeks before you get your money. Another disadvantage is paying high interest rates when repaying the money you borrow.
Some of the platforms you can borrow money under this arrangement include
There are many others. Just search for P2P lending sites on your favorite search engine to view a comprehensive list.
A visit to popular app stores like Google Play Store will give you access to various loan apps. Through these applications you can borrow small loans, which are normally extended for periods as short as one week. Most of these applications have one criteria of assessing new borrowers – the number of connections one has on social media. So if you are well connected with other social media users, you will be given a loan. Future loans are approved based on how well you repay what you have borrowed.
These loan apps are best when you need money to solve small emergencies because the loans are usually small and the interest rates high. They also tend to be tied down to specific geographical locations (countries) so you have to find one that works in your country
The main advantage is that you get the loan immediately you apply for one – even for first time users.
Visit your favorite app store and search for a loan app that serves people in your area.
Don't forget this website (Forex with Friends) is also a social lender. To get a loan you need to share articles like this one with your social media connections. Whenever someone registers after reading the article you have shared, you will be paid $10. Once you have earned $500, you will be able to start borrowing.