Tom

Troubadour

Hello there,

I’d really appreciate some advice.

I was wondering if anyone knows how likely it is that I’ll be granted a personal loan for £6000 considering my credentials! (It’s to put towards a car and to help pay some existing debt).

• I am self-employed and earned £12555 on the last tax year
• My existing debt is £6200 (2 credit cards (v. high percentage!) and an overdraft)
• I currently live at my mother’s place and pay just £130 per month rent (including council tax)
• My Experian Credit Rating is excellent - 999 points

I was going to apply for a smaller amount, however a member of staff in a bank told me that lenders are more likely to lend between £6000 & £15000, and also more likely to offer a loan on a 5 year contract - does anyone know if this is true?

A massive thanks for your time,

Kind Regards

Tom

[Deleted User]

Probably not. You'd be asking for a year's gross salary of credit in total, which is a lot.

As you're living at home with low costs, now is the perfect time to pay down the existing debt. This would open up your options later on.

jonesMUFCforever

Have you got a business account and a set of accounts to confirm your figures?
You have £6.5k debt even though your rent and council tax only comes to £130pm - how do you think you could afford a loan even if you could get one?

Troubadour

Thanks for your quick reply - very kind!

Forgive me if I misunderstand you or if I’m being stupid! (-: Would you be kind enough to explain how I would be asking for a years’ gross salary (£12555) in total credit? From what I’ve seen, most loans’ advertise total repayments of around £7000 on a £6k loan over a 5 year period...

Btw - "The guy in the bank!" also said that lenders will likely lend 50% of one’s annual salary. Do you happen to know if this is true?!!

...And you’re right about paying existing debt whilst living costs are low however, after doing some maths I think I’ll need a small loan. Based on my credentials, do you know if I’ll more likely be accepted for a smaller loan amount? Coz I noticed that, after exploring Sainsbury’s Bank for a £6K loan, they said “Please review loan amount. The total outstanding balance (i.e. existing debt) cannot be more than the loan amount”.

Does that mean that a loan amount always needs to be higher than existing debt?! That seemed unusual...

Sorry for all the questions!

Thanks again...

[Deleted User]

You have £6k in debt already and will be asking for another £6k - so £12k, which is your income. Although you may intend to use some of the next loan to pay off the old debt, the bank will assume you might not.

The 50% rule is often quoted and may or may not be true. But you're already at that mark, so your chances of further credit are very slim.

Troubadour

Hello - thanks for your reply...

Well I guess I can give my tax return as proof of my earnings, although I haven’t got a business account yet - working on it! (-:

I know it wouldn’t necessarily stand up in the eyes of a lender! However, I have confidence in my forecast for increased earnings based on my business plan...

P.S.
I agree with your statements about Karma...

Troubadour

Oh - I see!

Thank you very much for your time -I'll take heed of your advice...

Inlakesh

DCFC79

Your experian score of 999 is useless, its only useful to call the emergency services.

27col

You say that you have confidence in your forecast of earnings. However that is not the same as the bank having confidence in your forecast of earnings. You may have convinced yourself, but what you need to do is to convince the bank. Two entirely different things.

somethingcorporate

You'll have to do this the old fashioned way I am afraid. Saving!

Tixy

How much do you owe on the existing high credit cards?

Whilst a loan is probably unlikely on your salary it may be worth seeing if you can get accepted for a mainstream card with a better interest rate to do a balance transfer, whilst it wouldn't solve your current issue of money towards a car it would make your current debts cheaper.
You could try the pre-application indicators on this website.