How true is it that unsecured loan providers wont lend above 50% loan:salary ratio?

thetourist85

I've heard this being mentioned a lot, and I'm wondering how true it is. I would be interested in anyone's recent borrowing experiences.

I was hoping to raise unsecured borrowing which would bring my total amount to 80% of my salary amount. Whilst this sounds a lot, I have a relatively low mortgage repayment and other outgoings, so the loan repayments would be easily affordable.

Also, if I run the MSE eligibility checker, and NatWest quote tool, most of the loan options are >60% eligible. But I wasn't sure if this takes into account the total unsecured borrowing.

Advice appreciated.

Gaz83

It's not set in stone. It's recommended as a general rule of thumb.

boo_star

Gaz83 wrote: »

It's not set in stone. It's recommended as a general rule of thumb.

The above post is correct.

Nebulous2

What are you counting in the 50%? Credit cards in there as well?

I think with a good history it would not be difficult to borrow more than 50% from multiple sources. Getting a single loan over 50% would be more difficult, though people here often report managing it.

thetourist85

Thanks for the replies. I wonder, does the MSE eligibility calculator take into account current unsecured borrowing when it does it's soft credit check? Because when I put in amount which would make my total unsecured borrowing 80% of my salary, I still get loans which have a decent eligibilty rating.

HappyMJ

thetourist85 wrote: »

I've heard this being mentioned a lot, and I'm wondering how true it is. I would be interested in anyone's recent borrowing experiences.

I was hoping to raise unsecured borrowing which would bring my total amount to 80% of my salary amount. Whilst this sounds a lot, I have a relatively low mortgage repayment and other outgoings, so the loan repayments would be easily affordable.

Also, if I run the MSE eligibility checker, and NatWest quote tool, most of the loan options are >60% eligible. But I wasn't sure if this takes into account the total unsecured borrowing.

Advice appreciated.

You could borrow more. Of my declared income I owe about 90% of it in unsecured loans and credit cards. Although the figure is high it's affordable as the interest rates are very low.

I can still borrow more. As of last month I still get approved for unsecured overdrafts and balance transfer credit cards despite my outstanding debt being very high.

nelly12

thetourist85 wrote: »

I've heard this being mentioned a lot, and I'm wondering how true it is. I would be interested in anyone's recent borrowing experiences.

I was hoping to raise unsecured borrowing which would bring my total amount to 80% of my salary amount. Whilst this sounds a lot, I have a relatively low mortgage repayment and other outgoings, so the loan repayments would be easily affordable.

Also, if I run the MSE eligibility checker, and NatWest quote tool, most of the loan options are >60% eligible. But I wasn't sure if this takes into account the total unsecured borrowing.

Advice appreciated.

It's a myth! Lenders look at an overall picture. Not aware of any underwriters on here explaining their companies lending rules, just the usual experts who regurgitate stories they've heard in the pub! 👍🏻

jonesMUFCforever

Loans are granted on an affordability basis these days - so the 50% ratio may mean you are accepted or not - not any 2 applicants are the same but the bank's computer software means all customers are treated in the same way in the application process.