How To Get Approved for a Loan as a Contract Employee?

Being a contract employee doesn’t mean you won’t qualify for a loan. However, you must submit more documents to prove your income than a full-time worker. In addition, whether you are a small business owner or a contract worker, the lenders scrutinize you more to determine whether you will be able to repay the loan or not. Therefore, additional research and careful planning can help you get a loan with decent terms and conditions.

To help you prepare, we’ve compiled some helpful information on how to get approved for a loan as a contract employee.

Documents You Will Be Asked To Submit

To determine whether you qualify for a 1099 contract workers loan, each lender will have its rules and specifications. However, there are some standard documents that you will need to submit, regardless of who the lender is:

  • Income proof: Full-time workers can submit their monthly pay slips to show their income. Contract workers don’t have a fixed monthly salary, so they need to show proof of income to prove that they can repay the loan. You must submit tax returns or business bank accounts to authenticate your earnings.
  • Residency:You will most likely be required to show proof of residency to prove your citizenship.
  • Company details:If you have registered your business, you must also submit the relevant documents.
  • ID:To prove your age, you must also submit a copy of your government-issued ID.

How To Get Approved for a Loan as a Contract Employee

If you are a contract employee looking for a loan, you will need to jump over a few more hoops. Here are some precautions you can take which will help you increase your chances of getting a loan:

  1. Private lenders

Private lenders are far more accepting of contract employees than traditional lenders. But, again, it’s because they have a more flexible list of requirements for potential borrowers.

  1. Secured loans

If you are in a hurry to apply for a loan, choose secured loans over unsecured ones. In a secured loan, the lender will have collateral they can claim if you default on the loan. Because of this, lenders are quicker and less strict about accepting secured loan requests.

  1. Co-signer loan

If your credit score and history are bad and if you think you cannot qualify for a loan by yourself, co-signer loans may be a better option. A co-signer will be responsible for repaying the loan if you default. The co-signer should have a good credit score and sufficient monthly income to get accepted.

General Procedure To Get a Loan as a 1099 Worker

You’ll first need to check which lenders can offer the best interest rates and have reasonable repayment terms and conditions. Once you have decided on the lender, check what they require from you. Prepare all the necessary documents in advance to avoid last-minute troubles. Then, reach out to the lender and fill out their application form.

Traditional financing institutes may take a while to get back to you, while a few online lenders will approve your loan application within 48 hours. Although, this period will vary from lender to lender.


No matter what your financial situation is, you can qualify for a loan as a contract employee. Of course, you will have to work harder, but numerous options are available for 1099 workers. We hope this helps you better understand the loan application process and make a wise decision.

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