Debt to income ratios - Tesco

perdy1978

Hi
I'd be grateful for any advice. We are extending and need 35k. This, on top of our existing borrowings is less than 3 times our annual salaries which is fine, however it would push our monthly payments to 40% of our monthly income. Does anyone know what ratios Tesco uses for debt to income? We don't want to apply and be turned down because of this.
Many thanks

[Deleted User]

No one knows. A general rule of thumb is that lenders feel uncomfortable with more than >50% of income in unsecured debt. But that is very general.

What are your current debts and income? It seems that you are already very high, if this loan would take you to 300% of income. Or are you including a mortgage in that?

DCFC79

I'm not sure you can get 35k loans. you might be better off both applying on your own for a loan.

Pixie5740

I think Sainsburys go up to £30k but the best unsecured rates across most lenders is from £7,500 to £14,999. You could get a loan each but that still wouldn't give you the £35k you want. How much equity is in your home? Would it be possible to remortgage since you want to borrow money to extend your home?

Edit: The maximum Sainsbury's loan amount is £35k not £30k. The representative APR is 6.7% so additional borrowing on the mortgage, or a smaller loan plus 0% money transfer cards could be a better way to go.

Candyapple

DCFC79 wrote: »

I'm not sure you can get 35k loans. you might be better off both applying on your own for a loan.

Sainsbury's offer £35k loans:
https://forums.moneysavingexpert.com/discussion/5410393

DCFC79

Candyapple wrote: »

Sainsbury's offer £35k loans:
https://forums.moneysavingexpert.com/discussion/5410393

Did not know that, I take back what I said.

Pixie5740

Not to be outdone, Tesco are also offering loans up to £35k now as well with a representative APR of 6.9%.

http://www.tescobank.com/loans/

perdy1978

We have high borrowings as I have a business loan to input capital into my partnership however that money still sits in my capital account and in theory can be drawn back to me at any time. All of it, including the new 35k however is still less than 3 times our annual income, it is just the monthly ratio that is not as good, although easily affordable. We cannot re-mortgage as we won't have enough equity in the house until we extend - catch 22!! Once we have extended we will re-mortgage to pay off the loan but until we can get a loan to extend we are stuck! Tesco looks like the best option but like I say they won't tell me what ratio they use.

Pixie5740

Lenders don't publish their criteria for getting a loan otherwise some unscrupulous people would poggle their figures.

You could give the MSE loan eligibility calculator a go though.

https://www.moneysavingexpert.com/eligibility/loans-calculator/

[Deleted User]

Pixie5740 wrote: »

unscrupulous people would poggle their figures.

That's my new favourite word.

perdy1978

the only problem with the calculator is you can't do a joint application and also the criteria doesn't apply as the mortgage is in my husbands name only.