Why it is harder without a payslip
A payslip tells a provider three things at once: how much you earn, how regularly, and that an employer stands behind it. When you work for yourself, the provider has to reconstruct those three things from other evidence. That takes more work and carries more uncertainty, so fewer providers lend to self-employed applicants, and those that do usually charge more or lend less.
Fewer is not none. Freelancers, contractors, tradespeople and small-business owners borrow every day. What decides the outcome is mostly how clearly your income shows up on paper.
What providers ask for instead
Most providers that accept self-employed applicants ask for three to six months of bank statements from the account your income is paid into. Some also ask for your income tax number or a recent assessment from SARS, a letter from an accountant, management accounts, or proof that the business is registered. Expect to be asked for your ID and proof of address as well.
The statements matter most. A provider looks for regular deposits from clients, the pattern across months, and what is left after your personal and business expenses. Income that never touches a bank account — cash that goes straight back out — is very hard to verify, and on its own it rarely leads to an approval.
When income goes up and down
Self-employed income is rarely the same two months in a row. Some providers take an average over the months you supply; others use the lowest month, because that is the one that has to cover the instalment. Ask which approach the provider uses, and look at your own statements the same way before you choose an amount.
If your income is seasonal, borrow against your quiet months, not your busy ones, and prefer an instalment you could pay even in the worst month of the last year.
Personal loan or business loan
A loan to you as an individual is a consumer credit agreement under the National Credit Act, with all its protections: capped interest and fees, an affordability assessment and the right to settle early. A loan to a company or close corporation may fall outside the Act's consumer protections, especially if the business is above the Act's size thresholds, and is often secured with a personal guarantee from the owner.
If you sign a personal guarantee, you are liable in your own name if the business cannot pay. Read that clause carefully and understand that it makes the business debt your debt.
What it costs
A personal loan to a self-employed person is usually an unsecured credit transaction: interest at most the repo rate plus 21% a year, which is 28.25% while the repo rate is 7.25%. The initiation fee is capped at R165 plus 10% of the amount above R1 000, never more than R1 050, and the service fee at R60 a month, with VAT possibly added to the fees. Our loan cost calculator shows the legal maximum for your amount and term; the offers you receive will often be below it, but self-employed applicants should expect to be closer to the cap than salaried ones.
Making your application stronger
Pay your income into one account and keep business and personal spending apart where you can — a provider reading mixed statements sees spending it cannot explain. Keep your SARS returns up to date, because a recent assessment is the strongest independent evidence of income you have. Check your credit record before you apply; every South African may get a free report from each credit bureau once a year, and fixing an error first is easier than explaining it later.
Apply where you are likely to be accepted rather than everywhere at once. Each application leaves an enquiry on your record, and many enquiries in a short time make the next provider more cautious.
Alternatives worth considering
If a loan is for the business rather than for you, look at finance designed for small businesses: supplier credit, invoice discounting if you invoice larger clients, and the development-finance programmes run by government agencies and some banks. These are assessed on the business's own figures and can be cheaper than a personal loan, although they take longer to arrange.
If the need is personal and short, a loan against a policy or investment you already hold, or an arrangement with the person you owe, may cost less than an unsecured loan priced for self-employed risk. Compare the totals, not just how quickly each option pays out.
Getting your documents ready
Gather everything before you start an application, so that it does not stall halfway. Most providers that lend to self-employed people ask for some combination of: your South African ID; three to six months of statements from the account your income is paid into, downloaded as PDFs from your bank rather than photographed; your most recent SARS assessment or tax number; proof of address that is not older than three months; and, for a registered business, its registration documents.
Look at the statements as a stranger would. Are client payments easy to recognise? Are there large transfers you would need to explain? A short note explaining an unusual month — a large once-off contract, a holiday closure — can help, and some providers ask for one.
Whatever the provider asks for, it should never ask you to pay a fee before the loan is granted. That is not how registered credit works, whether you are employed or self-employed.
Comparing through RandScout
Tell us in the quiz that you are self-employed and we leave out the providers that require a payslip, so you only see registered providers that consider your situation. Comparing does not affect your credit record. You apply on the provider's own site, and the provider decides.