Self-Employed and Need a Loan?

Overview

With the rise of the gig economy and flexible work, freelancing is no longer just a side job, it’s becoming a popular way to work. Whether you’re creating videos on TikTok, running an online shop, driving for Grab, or baking cakes from home, you're part of Malaysia’s growing self-employed workforce.

In fact, the global freelance platform market was worth USD 4.39 billion in 2022 and is expected to grow by 16.5% every year until 2030.

And in Malaysia, according to the Department of Statistics, there were 2.97 million registered freelancers as of September 2023, making up 18.2% of the total workforce! (The Edge Malaysia,2024)

Yet despite this growth, many freelancers still face challenges when it comes to financial access, especially when applying for loans. One key factor that affects approval is your credit score. Understanding and improving your credit score is crucial if you want to qualify for better rates or even get approved in the first place.

 

Who Counts as a Freelancer?

Freelancers in Malaysia come from many different backgrounds, such as:

•   Content creators on YouTube and TikTok

•   Designers, writers, translators, photographers

•   Grab or InDrive drivers

•   Shopee and Lazada sellers

•   Home-based businesses like baking or tailoring

If you work for yourself and don’t have a fixed employer, you’re also probably a freelancer.

 

What Makes Freelancers Different?

Most freelancers share a few things in common:

•   No fixed monthly salary – Your income depends on how much work you get

•   Mostly cash or bank transfers – Not many keep formal records or invoices

•   No EPF or SOCSO – So there’s no official employment record

•   Many don’t file taxes regularly – Especially if their income is low

•   No registered company – Most are solo workers

 

Why Is It Hard for Freelancers to Get a Loan?

Banks prefer to get proofs of income, steady cash transaction, and a good credit history. In fact, one of the first things banks check is your credit score, if you don’t know yours, it’s hard to know where you stand. For salaried workers, this is easy, just show your pay lists and EPF statements. But for freelancers, this is where things get tricky.

Here’s why freelancers often get rejected:

•   No pay lists or EPF

•   No tax documents

•   Irregular bank transactions

•   Low or no credit history

•   No formal business registration

But don’t give up! It doesn’t mean you can’t apply, it just means you need to prepare different types of documents.

 

What Loans Can Freelancers Apply For?

Freelancers in Malaysia can apply for different types of loans, you just need to know what to prepare.

•   Personal Loan

No collateral needed

Good for short-term needs

Higher interest rate if your documents are weak

•   Home Loan

You can still buy a house as a freelancer

You’ll need to show more financial proof and wait longer for approval

•   Car Loan

A common way to buy a car through monthly installments.

You’ll usually need to provide a car quotation and proof of income. The car itself can serve as collateral.

 

What Documents Do I Need?

Freelancers can improve their chances by showing solid income proof. Here’s what you should prepare:

•   Bank statements from the last 6–12 months

•   Screenshots or records of client payments and orders

•   Tax forms or LHDN receipt

•   SSM registration (if you have a business name)

•   Utility bills or tenancy agreement to prove stability

•   CTOS / CCRIS credit report — this is what banks use to assess your creditworthiness.

Checking your credit score in advance helps you spot any issues and increase your chances of approval. You can easily get this report online, it only takes a few minutes.

Pro tip: If you sell online, Shopee or Lazada reports can help prove your income!

 

Conclusion

Just because you're self-employed doesn’t mean you can’t get a loan. You just need to prepare well. Keep records, show stable income, and apply smart, and you’ll have a good chance of getting approved.

Click here and start with a free credit score check and get your CTOS report.