Payday Loans for Gig Workers

Payday Loans for Gig Workers

Kerry Vetter
by Kerry Vetter
Updated: July 14, 2021

Table of Content

What Exactly Is A Gig Worker?
What Financial Issues Is the Gig Economy Facing?
What Loans Can Independent Workers Apply For?
How Are Payday Cash Advances and Installment Loans Different?
How Can Freelancers Use a Payday Loan?
Who Qualifies for a Cash Advance?
Eligibility Criteria
How Do You Prove Your Income as a Gig Worker?
How Much Can You Borrow as a Gig Worker?
What’s the Application Process for Payday Loans?
Our Main Benefits
FAQ

What Exactly Is A Gig Worker?

A gig worker is essentially an independent contractor who doesn’t get a regular monthly salary and benefits from one employer. Instead, gig workers are usually paid by the hour/project and collaborate with one or several companies. Their short-term contract work offers them more flexibility in terms of personal time planning. The category includes a wide range of workers, from small business owners to rideshare drivers, delivery people, freelance designers, etc. 

What Financial Issues Is the Gig Economy Facing?

Like the employees from other industries, the representatives of the gig economy may struggle financially. The unstable character of their jobs is a risk for both freelancers and potential lenders. On top of that, a gig worker doesn’t always have the credit score required by traditional lenders. Moreover, lenders often ask for proof of employment, which may be another issue for contract workers. In a nutshell, it isn’t easy for gig workers to access loans. Nonetheless, emergencies happen to everybody, regardless of industry. Fortunately, there are enough loan options to choose from, even when you have a non-standard job. If you are only starting your freelancing experience, consider the three main legal aspects that will help you keep your papers organized and access loans in case you need them.

What Loans Can Independent Workers Apply For?

Instant cash loans for self-employed

Contract workers can access a series of loans, including personal loans, payday loans, lines of credit, microloans, business loans, and invoice loans. Now, depending on the exact circumstances you have as a freelancer, some of the options may suit you better than others. 

Personal Loans

You can access personal loans through either a bank or a credit union. Be aware that you may need a fair credit score or collateral to be approved. You would pay back your debt in fixed monthly installments. 

Payday Loans

Cash advances are small short-term loans that you can take with minimal requirements. It is typically possible to borrow up to $1,000 from direct payday lenders within one business day.

Lines of Credit

If you don’t know how much money you need, a revolving line of credit may be a better loan alternative. There is a predetermined limit on these loans. You borrow as much as you need, then only pay interest for the sum of money you withdraw.

Microloans

Microloans are convenient for new businesses that don’t need much funding. You can borrow up to $5,000, collateral may be required. Microloans are very accessible, especially through the US SBA or NGOs.

Small Business Loans

Not all gig workers will qualify for a business loan. If you have a stable source of income and you can prove your business is going well, you may be eligible. A small business loan will require a clean tax history. 

Merchant Cash Advances

A merchant cash advance is a loan that you repay, together with interest, from your future sales. With this type of loan, your credit card serves as collateral. You would repay your debt on a weekly or daily basis. 

Invoice Financing

With invoice financing, you can use your unpaid invoices as collateral for a loan. Thus, you can get an advance on the amount that your customers owe you. 

Auto Loans

If you are a car owner, you can borrow money by using your vehicle as collateral. A car loan is helpful if you need cash fast.

How Are Payday Cash Advances and Installment Loans Different?

Cash advances and payday installment loans can both be provided by direct lenders. The application process is simple, and you can get any of them within one business day, if you qualify.

Payday Loans

Cash advances allow you to borrow up to $1,000 until your next payday. Direct lenders will typically approve 80% of applications. This is good news for contract workers who have a hard time being approved for traditional loans. The application process is fast, with some borrowers receiving their money in one business day or even on the same day they apply. The loan terms may vary between two and four weeks. The interest rate is a flat fee ranging between $10 and $30 for each $100 that you borrow. As soon as you receive your next paycheck, you have to pay back your debt plus interest. 

Payday Installment Loans

If you opt for a payday installment loan, you may borrow up to $5,000. The application process is similar to the one for a cash advance in terms of speed and simplicity. When it comes to repaying an installment loan, you have a longer time frame spanning several months. Thus, you pay back your loan plus interest in fixed monthly installments. 

How Can Freelancers Use a Payday Loan?

Independent workers can use a payday loan to solve personal financial emergencies or cover business expenses. In the majority of cases, a freelance worker applies for cash advances to pay for:

  • rent, buy groceries;
  • home office improvements;
  • gas, car maintenance, and repair services;
  • office equipment and utility bills;
  • promoting their small business (marketing, website, and business card making), etc.

Who Qualifies for a Cash Advance?

Cash advance for independent contractors

Most people, including contract workers, can qualify for a payday loan. As long as an applicant meets the main eligibility criteria, receiving a cash advance is simple. Most categories of freelancers can apply for a payday loan.

Sellers and Owners of Franchises 

  • Amazon, eBay, Etsy
  • Dominos, Baskin Robbins, Dunkin’ Donuts
  • Avon, Mary Kay, Amway

Freelance Platform Workers

  • Fiverr, UpWork, Freelancer
  • Guru
  • Toptal, PeoplePerHour

Driving or Taxi Services

  • Uber
  • Lyft
  • Ride-share

App Delivery Services

  • DoorDash, GrubHub, Slice, Instacart
  • UberEats, Caviar, Postmates, Shipt
  • Deliveroo, Tapingo

Small Business Owners

  • Beauty Salon
  • Cleaning Services
  • Catering Services

Independent Contractors

  • Business Consultants, Event Planners
  • Tutors
  • Trainers

Eligibility Criteria

To qualify for a payday loan, a candidate must:

To qualify for a payday loan, a candidate must:

  • Be least 18 years old;
  • Hold a US citizenship or a permanent resident status;
  • Apply in their state of residence;
  • Have an active bank account (a checking account will work just fine);
  • Share a valid phone number and email address for communication purposes;
  • Have a steady source of income and prove it.

Independent contractors don’t always have a steady source of income. If you are on unemployment benefits or disability benefits, you can still qualify. Having a good credit score is not a requirement. 

How Do You Prove Your Income as a Gig Worker?

Gig workers must pay their taxes. Typical employees get their taxes deducted from their salaries. However, independent contractors have to save for and pay their taxes annually, according to the IRS specifications for gig workers. Some lenders will accept alternative proof of income. Most will accept one of the following options as proof of income:

  • Pay stubs;
  • Monthly bank statements as proof of your employer/customers regularly paying you;
  • Your tax return from the previous year;
  • Proof of income letter, which an employer or accountant can write. It usually requires additional supporting documents;
  • W-2 form on wage and tax statement;
  • Unemployment or disability benefits;
  • Form 1099 on wage and tax statement for self-employed people.

In some cases, your lender may also accept screenshots from your dashboard, where your earnings are displayed. This may work for an Uber driver or app delivery people. The safest way to determine what exactly will work with a particular lender is by asking them directly what proof of income they accept. 

How Much Can You Borrow as a Gig Worker?

If you apply for a payday loan, which you will have to repay from your next paycheck, the maximum amount is typically $1,000. Depending on your state and income, a direct lender may offer you a smaller amount. Most applicants apply for payday loans when they need to solve a small emergency fast. Popular loan amounts include sums such as $150, $300, $400, $500, $550, and $700. On the due date, your debt is usually automatically deducted by the lender. 

If you need more funds, a payday installment loan would be more suitable for you. The amount of money that you can access through an installment loan is up to $5,000. Besides the flexibility of choice, you also repay these loans over several months. In other words, the monthly amounts are more manageable. On top of that, your monthly expenses become more predictable so that you can plan them ahead of time. 

What’s the Application Process for Payday Loans?

Applying online is safe and fast. You may use your personal computer, a tablet, iPhone, or smartphone to complete the application form. You will be done in no time. Moreover, your data will reach all the direct lenders in our network if you apply with us. To request a cash advance, you will need to go through a few simple steps:

1. Apply Fill out our application form and hit Enter to submit it.
2. Get Approved If you qualify, you will receive almost instant approval from one of the lenders in our network.
3. Receive Funding Access your money as soon as in one business day.

Our Main Benefits

  • Data Protection
  • Funding of up to $5,000
  • Easy Application
  • Almost Instant Loan Decision
  • 80% Approval Rate
  • Trusted Lenders Only
  • No Hidden Fees
  • Bad Credit is Not an Issue
  • Access to Funds Within One Business Day

FAQ

  1. Can I apply for a payday loan with bad credit?
    Yes, you can access payday loans, even with a poor credit score. Traditional lenders will pull your full credit report from the main credit bureaus and may deny you credit for a bad score. Direct lenders will do an alternative soft check instead. To them, a bad credit score is not an issue.
  2. Can I qualify for a payday loan as an independent contractor?
    Yes, an independent contractor may qualify for a payday loan on the condition that they meet the basic requirements.
  3. How much can I borrow as a gig worker?
    A gig worker may borrow a cash advance of up to $1,000 or a payday installment up to $5,000. The exact amount depends on your state, the lender, and the details you provide.
  4. Is my information safe?
    Yes, when you apply through our website, we ensure the safety of your data at no additional cost. Your information is confidential throughout the application process and afterward.
  5. Do I need income proof for a payday loan?
    Yes, you will need proof of income to qualify for a payday loan. Direct lenders check an applicant’s debt-to-income ratio to estimate if the borrower will be able to repay them.
  6. Where can I apply for a cash advance?
    You can request a payday loan through our website. The process is straightforward. All you need to do is to complete the application form and wait for approval.

Kerry Vetter is a consumer finance expert and writer, who has been engaged in creating finance-related content for more than ten years. Her expertise is approved by obtaining a Bachelor of Science in Finance from Boston College, as well as receiving three major certificates as a professional advisor and counselor.  At the moment, Kerry is an author of multiple educational articles and insights that have been created in order to increase and develop financial literacy and responsible borrowing among US citizens. Her expert relevant savings advice has helped a lot of people overcome their financial issues and find out more about principles of smart spending, the right investment decisions, and budgeting.  You can read more about Kerry’s professional background here.

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