Advice please! Personal loan application when self-employed

ClaireC81

Hello,

I hope someone can help me.

I'm planning to apply for a personal unsecured loan - but am not sure how to go about checking whether I'm likely to be accepted.

I'm fearful of applying if I have no chance, as we're also planning to make a mortgage application soon and I don't want my credit record to have a failed loan application on it.

To explain...

I have a few credit cards with high interest rates and wish to consolidate them with a loan. This is partly to help my mortgage application (as it would reduce my outgoings).

I have a clean credit history (I've recently obtained my report from Experian).

However, I'm self-employed. My gross income was about £18k last year (net profit £16k, after expenditure deductions). I don't have an accountant, but I'm all above board with HMRC and have paperwork, etc.

Most advertised loan offers seem to be between £7.5k and £10k. I'd be going for the lowest amount (£7.5k).

Can anyone offer advice on my situation?

Also - how would a failed loan app affect my credit report? Would it simply show that I'd applied, and the amount - or would it also show the result? If the former, then surely it'll have the same impact whether I'm accepted or rejected...?

Please help!

Thanks in advance

jonesMUFCforever

Putting your credit card debt onto a loan doesn't mean the debt is any lower so won't effect your mortgage application one way or the other.
Have you asked your bank?

leveller2911

To get a mortgage you will need a deposit.Pay off your Cards from your savings/deposit and work like mad to bump your deposit back up.Banks will look more favourably for a mortgage if your debt free ..... Good luck .

gadjah543

Also just to add if you are applying for a mortgage soon you will need to have your accounts verified by an accountant for most lenders.

ClaireC81

Hi all... thanks for replies

Would be grateful for more, though!

Concerning the points responded to so far...

Credit cards v loans
A loan is preferable because on mortgage applications, they ask you to state your monthly repayment for the loan - whereas for credit cards you have to state what's outstanding (which looks worse!). Also - the loans I'm looking at would mean lower monthly repayments than what I'm paying off for the cards. And at a lower interest rate (saving money long-term). Reduced outgoings are better for mortgage applications.

Mortgage deposit
Yep, we've got this in place waiting to be used. Thankfully! Want to try an app WITH debt first. Obviously if we were refused on that basis, we'd devise a plan B. My debt isn't very high... and I have no defaults or late payments, so I've proved I can manage it, which has kept my credit score strong.

Accountant verification
I've checked this out and fortunately it's not strictly necessary, if you have properly filed income and tax records with HMRC (which I do). Using an accountant is optional - though obviously some institutions would prefer it. There's also the option to get an accountant to check your accounts on a one-off basis, then sign off on them, which I may think about if necessary.

The main question remaining is...

How to go about checking whether I'm likely to be accepted, given my situation as described above?

Also - how would a failed loan app affect my credit report? Would it simply show that I'd applied, and the amount - or would it also show the result? If the former, then surely it'll have the same impact whether I'm accepted or rejected...?

[PS - I will be asking my bank, but unfortunately their advertised loan rates are nowhere near as good as some other lenders.]