Self employed loan advice ...

dazjb

Hi all. Firstly great site you have here, I have been using the site and forums as a research tool when needed for months now and found tons of useful info, this is the first time I have needed to ask direct for any advice.

My circumstances - I am classed as a self employed PAT testing engineer but receive a regular monthly cheque from a company I am sub-contracting to. I have been doing this work for approx 18 month now. The company find me all the work I need, I just invoice them at the end of the month and get paid via cheque on the same day the following month so therefore I can prove my income of around £23k.

I am about to apply for a loan for £8k to clear my overdraft and to consolidate a few credit cards I have. Could anybody advise on the best lenders to approach as I do not want to harm my credit score too much by getting multiple hits, I have already applied to my bank (Lloyds TSB) who did accept a loan but with a 16.9% rate.

Any help would be appreciated from the self-employed who obtained a loan or indeed from anybody who can point me in the right direction.

Thanks in advance.

Darren

chambta

Sounds like the loan approved but due to risk based pricing was hiked up in cost. This from my own experience at present is very common. Did the bank suggest why this might have been from their side? Of course they aren't obligated to but if say for example you have exceeded limits with them it may explain it.

If you have but your external credit rating is spotless then it may well be worth looking into someone else eg A&L or Tesco PF but no guarantee. If the 16.9% is no good to you then you may be best advised to throw as much as you can at the cards in order to bring them down yourself before relooking at the situation in 6 month.

dazjb

Thanks for the quick reply. Lloyds TSB have a 'scoring' system they use on the way you run your account. If you have recently gone over your agreed overdraft limit or you are always near the limit then your score with them is not too good. I think this is one of the reasons for this high rate along with being self employed.

Other than paying one credit card payment a couple of days late about 18 month ago I do have a good credit history. I have had many loans and credit cards in the past which I have paid off without ever missing a payment.

I may have to try a couple of others but do not want to ruin my credit rating whilst applying which will then leave me with no option but to accept the 16.9% from Lloyds TSB.

chambta

If the Lloyds one is agreed it presumably sits 'pended' on their system for a month at a guess. If you have no intentions to apply for anything important in the next 6 months a couple of other applications won't harm. My guess may be right and you could get a reasonable rate but if not you can always go back to Lloyds and take their offer.