Getting a loan as a fixed term contract employee

[Deleted User]

Hi guys, joined the forum to ask this question but I find myself browsing on here often enough anyway!

So, I'm currently coming towards the end of a 12 month fixed contract with my employer, and they have expressed that they want to keep me on which is great! Problem is, they said they aren't sure if they can offer me a permanent position (some internal process rubbish that's beyond my bosses boss control...it's a huge company and they don't always do things that make sense because of weird internal processes. Basically it will be easier and more likely that they can keep me if I'm on a fixed term contract).

My question is, do loan lenders not lend to those on fixed term contracts? I'd be looking at a 10k loan over 4 years. I have a 999 credit score on Experian if that makes a difference at all. Am I best asking loan companies what their likelihood is offering a loan to someone in this position? Also finally, anyone managed to get a loan in this position? Thank you!

ReadingTim

I don't think lenders check your employment status for loans like they do for mortgages, but I stand to be corrected. Rather they will look at all the usual stuff - credit history, affordability, current income, current outgoings, other borrowings etc - basically the position now, and your behaviour in the past, rather than what might happen in the future.

However, regardless of what the bank decide, YOU might want to consider what would happen should you borrow the £10k then find your contract isn't renewed. How long is it likely to take to find another job? Can you pay your current bills, plus the loan repayments until you find another job?

DCFC79

I echo the previous post. I don't know about contracting but could you be let go mid contract ?

Arleen

As a contractor, you are best not to get a loan, and this is years of experience talking here. So whatever you want the 10k for, either look for much cheaper alternative or start saving because of contracts cometh and contracts goeth. Additionally, do not count on the extension until it's done and signed, as with any financial/corporate-political turbulences we are first to get the axe.

[Deleted User]

Hi many thanks for all the replies,

I should have mentioned the loan is for a car, and that my other half earns enough to cover all our living costs too if worst came to worst. Moreover, if it's another fixed term contract I'm offered and come next year I'm not kept on, I have enough savings to cover the cost of the loan until at least another year and a half beyond the possible end of employment. If during this year or two I didn't find another job, then I could sell the car which would cover the loan and release some of my money back (of course depreciation means I'd not get all the original invested money. The car is £14k 2nd hand; I'm planning to put £4k of savings towards the car with the remaining £10k covered by the loan, and the car is not expected to be worth less than what will be left to pay on the loan a year or two after potentially being unemployed. Example: if I started my loan just as a new 12 month contract commenced, and then wasn't kept on, and was out of work for a year and a half, there would be approximately £4k left to pay. The car sale would cover the cost of this and also return some of my savings). Aternatively my other half could cover the cost of the loan if needs be.

I'm not great at explaining things over the internet but I hope this has shown that I have thought of the possible outcomes and if crap really hit the fan then selling the car is a worst case scenario but also a very real solution.

I'm happy to hear that banks don't care about fixed term contracts for a personal loan, although I find it odd considering surely they should be assessing whether or not you have the means to pay them back. I'm not a homeowner either but when commencing a soft credit check for a loan this wasn't seemingly an issue and I still got 3% apr offering (which sure does beat the 6%+ apr offerings from car dealerships...).