Loan affordability

melj16

I'm considering getting a loan for a new kitchen. How can I find out what a lender considers as affordable? I have annual salary of £44600 and I would ideally like a £20k loan. I have £780 mortgage and no other credit commitments.

[Deleted User]

By using an eligibility checker. Not everyone will be comfortable at that level, but you should find someone.

melj16

Deleted_User wrote: »

By using an eligibility checker. Not everyone will be comfortable at that level, but you should find someone.

They ask for all of your info.... I don't want a credit check until I'm ready to apply. Does the eligibility checker do a credit check?

[Deleted User]

It's a soft search.

melj16

I just did it.... A few came up with 95% chance.... And that was for £20k.....at 3%

Thanks for the advice

Willing2Learn

melj16 wrote: »

... A few came up with 95% chance.... And that was for £20k.....at 3%

The 3% APR is just a representative rate and is subject to credit checks and status. Only 51% of successful applications will get the 3% APR headline rate. If the application and credit checks show a higher risk, then the rate goes up...

kelevraz

Problem with soft searches is, they're often a lot more optimistic than what you'll be offered.

I recently used an eligibility search, and was told i had 95% of getting a 6k loan, ranging from 2.7%-4%. And this was from most of the lenders that came up, I think my financials are pretty well run

So i went ahead and applied, and got approved... but only at 12.7.. it didn't make a HUGE difference to the monthly payments (only around £20), but it did make what i felt was a huge difference to the overall 'cost' of the loan, and in the end i decided against it, because i'm the type of person that cares way more about how much the loan will cost overall than monthly payments

foxy-stoat

melj16 wrote: »

I just did it.... A few came up with 95% chance.... And that was for £20k.....at 3%

Thanks for the advice

See you again in a week or two when they offer you a higher rate and you come back asking why.

Clive_Woody

melj16 wrote: »

I'm considering getting a loan for a new kitchen. How can I find out what a lender considers as affordable? I have annual salary of £44600 and I would ideally like a £20k loan. I have £780 mortgage and no other credit commitments.

I appreciate I have no idea on your plans, but £20k for a kitchen seems quite "generous". Have you got a few quotes to see if you could save money and still get a very nice kitchen fitted?

melj16

Clive_Woody wrote: »

I appreciate I have no idea on your plans, but £20k for a kitchen seems quite "generous". Have you got a few quotes to see if you could save money and still get a very nice kitchen fitted?

I know it's quite a bit for a kitchen. I need walls knocked down, I want bifold doors fitted. I have had a couple of quotes. We will also need to put more money towards it. We're looking at around £23k

Candyapple

It’s also worth pointing out that £23k for a kitchen (yes I understand your reasons why) are very high and unless you are planning for the house to be your ‘forever’ home, then please don’t forget about what the ceiling price would be if your house was to go up for sale in the near future. No point spending £23k if you wouldn’t be able to recoup that loss later.