If you are self-employed and you’re applying for a Personal Loan or Personal Credit Line through Upgrade, please use this article as a guide on how to:
- Identify the required documentation; and
- Estimate your income for verification purposes.
Please note all information obtained will be used to verify your eligibility. If the recent trend in your income is lower than prior years, your qualifying income may be adjusted downward for credit qualification purposes. If we are unable to verify your qualifying income, you may be declined for a Personal Loan or Personal Credit Line through Upgrade.
What if I don't have the required documentation?
If you do not have your most recent two (2) years tax return filed, we may not be able to verify your income and your application will be denied. We will require the following documents, at a minimum:
- Full two (2) years tax returns with all pages;
- All relevant schedule and related documents, including the pertinent schedules (e.g., Schedule K-1, Schedule C, and 1099); and
- Most recent personal or business bank statement (whichever reflects your business income).
How do I annualize my income?
To annualize your income, add up all of your relevant income deposits for this year, divide by the number of months that have occurred so far in the year, then multiply by 12 months.
Annualize Income = Average Monthly Income multiply by 12 months.
- 2017 Jan Income: $4K
- 2017 Feb Income: $5K
- 2017 March Income: $3K
- 2017 April Income: $6K
Average Monthly Income = ($4K + $5K + $3K + $6K)/4 = $4.5K)
($4.5K x 12) = $54K
What kind of documentation is required?
Use the table below to locate your type of income and note the main required income documentation. Please note that this is not an all-inclusive list.
How should I calculate my self-employed income?
Use the table below to guide you through calculating your qualifying self-employed income: