Contractor struggling to get a loan

gazzaman28

Hi guys, I was recently been made redundant and after a couple of months out of work found work through an agency as a contractor. I'm on a 3 month contract which I've been told unofficially will be extended for another 3 months at least. I'm paid through an umbrella company who sort out Tax & NI and pay me as if I was on PAYE.

I'm struggling to get a loan for a car - when I tell the companies (tried Tesco & Sainsburys so far) that I'm a contractor on a short-term contract they just don't want to know, or at least will not give a loan if the repayments go beyond the time i'm in my contract for (and who gets a loan for less than 3 months?!)

Now I appreciate that I could be seen as a higher risk than someone on a company payroll, but surely no-one could be seen as being completely risk-free, not many jobs give you more than a few months notice of redundancy. My feelings are that if I'm out of work then short-term I have money saved to cover my bills, and long term I would just have to sell the car to pay back the loan. Coupled with the fact that contractors are generally better paid than their PAYE counterparts I can't really see that there should be such a negative attitude towards me.

I've got an appointment with my bank on Monday to see what they can offer me, and seeing as they know pretty much my complete financial history for the last 15yrs I would hope that they would trust me more than anyone else, but if this doesn't help then what else can I do? I've been searching online for information but there seems to be lots of information about contractor mortgages but very little for unsecured loans.

tobiascurious

you are employed by the umbrella company, you don't know long that will last as there might another job after this one, so just tell them that you are employed by that umbrella company

VIGILANT22

tobiascurious wrote: »

you are employed by the umbrella company, you don't know long that will last as there might another job after this one, so just tell them that you are employed by that umbrella company

I don't think your suggestion is very clever!

The OP will be asked for a 3yr employment history, all lenders reserve the right to contact employers...To state different, and be discovered this would be deemed as fraud and you can imagine the rest from there.

tobiascurious...If you cant post helpful and legally don't post at all...

tobiascurious

VIGILANT22 wrote: »

The OP will be asked for a 3yr employment history, all lenders reserve the right to contact employers...To state different, and be discovered this would be deemed as fraud and you can imagine the rest from there.

please note that it's a loan not a mortgage that is wanted

[Deleted User]

tobiascurious wrote: »

please note that it's a loan not a mortgage that is wanted

and that means?

fraud is fraud

tobiascurious

gazzaman28 wrote: »

I'm paid through an umbrella company who sort out Tax & NI and pay me as if I was on PAYE.

it's not fraudulent to say that you're employed by the umbrella company

hullight

If you don't desperately need the car don't bother, you've got a fair chance of being out of work again the next 3-6 months. If at that point you had to go on a debt management plan, you might not be able to get a decent loan for the next six years.

Maybe look at getting an old banger, or even a scooter if possible.

strictwithmoney

hullight wrote: »

Maybe look at getting an old banger ......

My neighbour bought one for £500 and it lasts a year.

Worth looking around.

diable

woodbine wrote: »

and that means?

fraud is fraud

The Banks have got away with it for years so why not play at the same table?

gazzaman28

Thanks for your replies.

I'm wondering if i'm being a bit too honest - if I just tell the loan company the name of the umbrella company and leave it at that will that will be accepted or if they spot that it's an umbrella company would they automatically reject my application? Does anyone know what sort of questions a loan company would ask an employer?

Are there any loan companies which specialise in contractors? It must happen surely...?

property.advert

If the amount is over £7500 they will want payslips and perhaps want to telephone you at your employer's place of business. If it is under £7500, then it is likely that they will make all their assumptions on your credit file and your application.

First get your credit files from all the agencies and stop making applications.

Then in about 3 or 4 months time, perhaps even 6 months, you have to write up an application form which states your employer and salary. In the interim, I would perhaps either ditch the umbrella or open a Ltd business account and make payments to your current account. This will be your real salary.

Basically, you are going to have to be economical with the truth because their predefined forms do not work with your income pattern. Keep it under £7500 and if it is for a car say you already have £10,000 towards a £17,000 car (even if it is trade in) so you are borrowing less than 50% of the purchase amount. They cannot prove anything and if under 7k, they should just rely on your credit file.

You can of course get anything printed up such as wage slips by googling.

It is not fraud, because you really do earn what you state, just not how they would like to see it.

Obviously you have worked there 10+ years and had your bank account 10+ years etc. It is not rocket science.