Loan approval with a job contract

RebeccaPlant

Hi everyone,

I have a job offer and signed contract for a well-paid, permanent job starting in 4 months' time. I am currently completing a master's degree so I'm not working. In the meantime, my partner and I are planning to buy a narrowboat to live on. We want to buy this boat in the next month or so, so that we can move out of our flat, make renovations to the boat, and get set up on it before my job starts.

Our budget is £25k, and since I'm not working yet the plan was to ask my parents to take out a loan on our behalf, which we would pay back through them. I would much rather be independent and apply for the loan ourselves, but I was worried that as a student, I would not be accepted for the loan. Furthermore, my partner, who is working in a permanent job, was made bankrupt about 10 years ago. He has been discharged and has got proof of this, however we are still worried about his credit score.

The situation with my parents is more complex than I thought and looks like it won't work out for us. Therefore, I would like some advice on how likely it is that I would be accepted for a £25k loan, considering I have a signed contract of employment? How likely is it that my partner would be approved for such a loan?

We have budgeted fairly thoroughly and will be able to pay off the loan within 2 years. In terms of starting the repayments before my job begins, that will be more difficult but we have some contingency so we can still make them.

Thanks so much in advance for any advice you can give.

[Deleted User]

You won't get a loan without being in work, and ideally for some months at least.

If your partner is more stable, then he has a better chance. His credit score won't impact anything - but his credit history in the last 6 years will.

He's going to need to be on a decent salary though for a 25k loan.

RebeccaPlant

Thanks for your reply zx81. That's what I feared.

He's going to need to be on a decent salary though for a 25k loan.

What do you count as a decent salary?

DCFC79

RebeccaPlant wrote: »

Thanks for your reply zx81. That's what I feared.



What do you count as a decent salary?

How much does he earn ?

Who told you to worry about the score ?

Only your partner can see his score and you yours. Lenders see the history.

Theres no universal score, theres 3 agencies who hold information which banks etc use, clearscore, noddle, experian.

Im not sure if signing a contract would be of any use, the emlloyer could turn round and let you go before you start work.

Theres a 4 month period befoe you start work, how would you make the loan repayments ?

Could you wait untill your in work ?

[Deleted User]

RebeccaPlant wrote: »

What do you count as a decent salary?

I'd guess at least 40k, if a great credit history and no other debts.

But if payments are going to be a challenge without you earning, I'm guessing he's not earning enough (or his outgoings are too high).

laidbackgjr

RebeccaPlant wrote: »

Thanks for your reply zx81. That's what I feared.



What do you count as a decent salary?

Normal guideline is that you can borrow 50% of salary - so to get a £25k loan would typically require your salary to be £50k.

RebeccaPlant

Thanks everyone. He earns nowhere near that at the moment and hasn't got much of a credit history at all - we've completely avoided taking out credit in his name because we were fearful of the bankruptcy still hanging over us (perhaps unnecessarily). We have, however, been living in the same place for 4 years and are on the electoral roll, etc.

Sounds like we'll need to rethink our plans. Sightly heartbreaking!

DCFC79

RebeccaPlant wrote: »

Thanks everyone. He earns nowhere near that at the moment and hasn't got much of a credit history at all - we've completely avoided taking out credit in his name because we were fearful of the bankruptcy still hanging over us (perhaps unnecessarily). We have, however, been living in the same place for 4 years and are on the electoral roll, etc.

Sounds like we'll need to rethink our plans. Sightly heartbreaking!

Its a good plan to move to a house boat, have the idea as a goal and get saving.

Maybe if you were in the job you might have better luck in applying for a loan.

Maybe you both get a copy of your credit reports from 3 agencies.

RebeccaPlant

Maybe you both get a copy of your credit reports from 3 agencies.

I think that's a good idea. How does the MSE Credit Club match up?

DCFC79

RebeccaPlant wrote: »

I think that's a good idea. How does the MSE Credit Club match up?

It takes the info from Experian, not used it myself.

Candyapple

The free versions to check your credit files are below:
Experian: https://www.moneysavingexpert.com/creditclub
Call Credit: https://www.noddle.co.uk
Equifax: https://www.clearscore.com

Your partner shouldn't be fearful of taking out credit, once the bankruptcy was wiped off his files 4 years ago, he should have been fine applying for things.

Take out a credit card and set up a direct debit for the minimum payment and then make small purchases each month, that way your credit history will rack up those green zeroes and count in your favour.

No credit history or a slim file is as bad as a poor credit history because you are classed as an unknown to lenders.