It is expensive to run a business, especially if you are self-employed. In fact regardless of the size of one’s business you will always have some unexpected expenses to cover. When it comes at a time when your cash flow is tight, you might want to consider getting a low doc loan.
Here are tips to get the cheapest loans and save money in the long run:
1) Plan ahead
Before you get a loan, it is important to make a spending plan. Many entrepreneurs put their spending budget on the back burner as they are too wrapped up in their work or business ideas. While some last minute loan deals can certainly help you meet your financial needs, it is a myth that your budget will just work out even at the last minute.
A well-prepared spending plan for your new loan takes more than a couple of days to plan. So, if you’re contemplating about getting a loan, start planning on what to do with your money the first time you thought about getting a loan.
What makes a good Spending Plan?
- Figure out what expenses fall under your income and expenses. Your credit card is not your paycheck. A lot of people know this, but the way they use their plastic, you’ll think it’s free money that they can spend without limits. If you’re one of them, don’t worry—you simply need to leave that piece of plastic at home when you’re tempted to go out shopping. In fact, taking out low doc loan instead of using your credit card can save you lost of money. The reason is simple—you know it is a loan that you have to repay shortly, unlike a credit card which is so convenient to use; you’ll think it’s a part of your wallet.
- Find ways on how to cut down on your expenses, no matter how small it is. It can be a few hundred dollars, or simply a dollar—but if you continue doing it, you can save more money in the long run. Once you figure out a way to reduce your expenses, it will be easier for you to allocate an amount of money on useful items. One of its purposes is for you to be able to set aside some savings. It may take a little bit of work at the beginning and frequent evaluation of how you are doing it every month, but it will definitely work.
- Identify the expenses that you can do without. It is important to know not only what you are spending money on, but how practical it is to spend on it, so that you can begin planning your budget. The moment you begin to plan your spending, you will feel in control of your money.
A lot of people don’t really like to plan their spending because it takes a lot of work. But, filing your receipts, keeping your books, and making a personal statement of assets and liabilities could really help you make practical business decisions.
2) Choose specialised lenders that offer products designed for self-employed individuals with limited financial documents.
There’s no point in applying for loans in banks and mainstream lending companies when you’re not qualified. They may only do two things—reject your application because you lack the financial documents to back your request; or charge very high interest rates to offset the risk of lending money to a high-risk borrower.
It’s a principle in life—Go where you are wanted. Work with people who are in the business because they want to help self-employed borrowers to have a fair access to cash whenever they need it. They have loan products with terms and conditions that match the needs and financial positions of a self-employed borrower.
If you are a sole proprietor, an independent contractor or a consultant you may not have the financial requirements usually required by banks. So, instead of doing your best to convince banks to lend you money, why not apply at a specialized lending company? You can use low doc loans to consolidate debts, renovate your home and for personal and business purposes.
Boost your income. If you’re planning to get low doc loans, you might as well use a portion of the loan proceeds to increase your income. When you do, you may realise that it’s not really difficult to find money to save every month. Whenever you have an extra income or a raise—put it aside. Bank your bonus instead of using it for living expenses. Work overtime at least once a week; you may be surprised at how many extra dollars you can earn by doing so.
If you are serious about learning how to save money, not only on low doc loans, but on your daily expenses, you have to find simple and practical ways to do it, at all times. For example, if you get paid extra-large commission, consider saving a portion of it. Put it in a savings account—whether it is a retirement fund, or mutual funds, or any financial vehicle that grows overtime. After many years, you’ll still see the living proof of your hard work. That’s a better way of enjoying your reward instead of using it for entertainment or other non-profitable expenses.