Most people opt for freelance jobs, real estate investment, and self-employment, especially since Covid-19 hit the world. Freelancing and other independent jobs have been on the rise. A recent study shows that the US is the biggest gig economy market, with Florida and California being the leading states.
That said, it’s becoming tough for people in these professions to get personal loans, payday, and mortgages to finance their needs. As a result, some lenders have braced themselves to help people in the gig economy to get loans using bank statements.
These statistics show the need for bank statement loans Florida because freelancers can’t provide payslips for their earnings. This blog explains more about bank statement loans Florida and how you can qualify for one in Florida.
Keep reading to learn more about these loans and how you can benefit from them. However, if you are struggling with bad credit, we have incredible ways to improve your credit score.
Now,
What Are Bank Statement Loans Florida?
Bank statement loans are the loans you get by providing your bank statement to your lender as proof of income. As you may know, most lenders require a physical employer and a stable income flow before approving your loan.
Bank statement loans are a form of non-qualified mortgages that professionals in the gig economy can take advantage of to own homes and estates.
If you require a bank statement loan, your lender will not ask you for the other details needed in other types of mortgage loans like Tax forms, W-2 forms, etc.
Whether self-employed or freelancer, you can get bank statement loans to help you make huge investments. For instance, you can get a car loan, a mortgage, or a personal loan with your bank statement.
Bank statement loans don’t have any protection for either lenders or borrowers, thus, they may be riskier. As a result, most lenders do not offer these loans.
How Do Bank Statement Loans Florida Work?
For Freelancers
As a freelance worker, you can get bank statement loans Florida after providing your 2-3 years bank statement. This range is beyond the normal loan application; you provide only a three-month bank statement if you have a stable job and employer.
As you might know, freelancers do not have a constant flow of income throughout the year. In some months, the income might be low, and in other months high. In addition, freelancers do not work for a single employer. Instead, they have several employers with different tasks.
Therefore, with this inconsistency in income flow and employer flexibility, getting loans from other lenders, such as payday loan lenders, becomes hard. And that’s where bank statement loans in Florida come into the picture.
The bank statement should contain all the flow of your income over the years so that the bank proves your income. Therefore, ensure the statement you provide has the highest number of income transactions.
Once you provide a valid bank statement, the lender will now consider your credit score to know what they should lend you. If you have a bad credit score, you may have to rebuild it before applying for bank statement loans Florida.
If you qualify for a bank statement loan in Florida, you can use it to finance a home for you. You can also invest in commercial properties using a bank statement loan in Florida.
However, you can still get bad credit bank statement loans, but they come with high-interest rates. Therefore, if you want better interest rates, work on your credit score first. Consider taking bad credit loans to rebuild your credit first.
For Business Owners
There is a slight difference in how bank statement loans in Florida works for freelancers and business owners. Business owners should provide bank statements and a profit and loss statement, which freelancers don’t provide.
In addition, business owners in need of bank statement loans in Florida should have active bank accounts with many transactions over a year. However, you can provide personal and business bank statements to increase the chances of qualifying for a bank statement loan in Florida.
The bank statement loan lender may also ask you for other details like the number of employees and any other expenses related to your business. This information helps the lender to assess the risk of giving you a bank statement loan based on your business.
The business sometimes acts as collateral against the loan the owner applies for. Therefore, if they don’t repay the loan, the lender will have the right to auction the business.
Most lenders of bank statement loans Florida have an early repayment penalty fee. Therefore, if you plan to refinance your loan in the future, you may incur extra charges.
Requirements For Bank Statement Loans In Florida
- A bank statement, personal or business, of between 12 and 24 months.
- Good credit score, preferably above 620. Build your credit before applying for bank statement loans.
- Proof of enough funds to make monthly repayments for the loan.
- At least two years working in the gig economy either as a freelancer, business, or real estate investment.
- Business records such as profit and loss accounts and expenses analysis
- You should have at least a 10% downpayment for the loan you take.
Who Gets Bank Statement Loans Florida?
If you are a freelancer, a business owner, a real estate investor, or anyone else working in the gig economy, you can get bank statement loans in Florida. However, you should have a good credit score of above 620 to get these loans with lower interest rates.
In addition, the amount of loan you get depends on the number of income transactions according to your bank statement. Therefore, if you want a mortgage loan, you should have a huge income flowing into your bank account.
What Credit Score Do You Need For Bank Statement Loans Florida?
With a credit score of at least 620, you are guaranteed to get bank statement loans in Florida. However, your lender will request a huge downpayment. If your credit score is lower than 620, you can aim to build it first. Remember, you can qualify for a higher bank statement loan from Florida lenders if you have a good credit score of above 700.
A good credit score when applying for a bank statement loans Florida helps you to get excellent rates and a lower downpayment. Therefore, you should aim to grow your credit score before applying for these loans.
Furthermore, you should also focus on applying with a bank statement you have used more frequently over the last 2 years. In addition, if you don’t have a credit score, you can build your credit by borrowing and repaying loans on time until you have a good credit score.
Where to Get Bank Statement Loans Florida
You might be wondering who would want to give you a bank statement loan. Well, it might be tough to get a lender who will help you with such a loan. However, with a loan broker, it’s easy to get bank statement loans Florida.
A loan broker does the work on your behalf, and the good thing is most of these brokers don’t charge you. They have a good network of lenders where they can easily search for a suitable lender for you.
Therefore, you don’t have to waste your time searching for a lender for bank statement loans Florida once you can use a loan broker and get a response in a few minutes.
Are Bank Statement Loans Florida a Good Choice?
Well, this depends on your urge to get a loan. We all know that some purchases like that of a home or a car usually need a huge amount of money. Therefore, it might be the best option to get bank statement loans Florida if you want to grow.
However, it’s always advisable to gauge your income and apply for a loan you can comfortably repay. Freelancing and businesses do not always have a stable income flow. Some months have huge profits, while others have less income or losses.
You should also be prepared for the huge down payment that the lender requests you to pay before approving your loan.
Advantages of Bank Statement Loans Florida
- Less documentation
- Higher loan limits
- You provide 12 -24 months’ bank statements instead of tax forms and W-2s
- The downpayment can be as little as 10%, although that depends on your credit score.
Disadvantages of Bank Statement Loans In Florida
- Higher credit score requirements of above 620
- Could have higher interest rates than normal mortgages
- Most lenders do not offer bank statement loans
To Conclude
Now, as a freelancer, business owner, or worker in the gig economy, you should no longer worry about getting external funding to buy a home, car, or other personal stuff. However, you should work on your credit score to improve your chances of approval and get lower rates.
What are your views on bank statement loans Florida? Let’s discuss this in the comment section. Don’t forget to subscribe to get amazing tips to grow financially.
Frequently Asked Questions
- Can I get bank statement loans?
Yes. You can get bank statement loans, but you should have a high credit score to qualify for one.
- How do bank statement loans work?
These loans allow self-employed individuals to get loans without providing tax returns and payslips. Most beneficiaries of bank statement loans are freelancers, business owners, gig workers, and contractors.
