Personal loan - self employed

hannahjaynexo

Hi, Please can someone give me some advice.
So I have been self employed for 1 year and 4 months. I have books for 1 year. I pay money into my business account which all of my outgoings go out of and pay myself my wages into my personal current account (which no bills come out of).
I applied for a £12,000 personal loan this morning with the same bank i have my personal and business account through. I however thought because its a personal loan i would need to put my personal bank details in and when it asks for how much money i make monthly i would just enter my wages i pay myself. I have been rejected.... i am assuming that is because there are no outgoings from that bank account as they all come out of my business?
Im not sure what my next step is plus i know when you apply for loans it affects your credit rating...

[Deleted User]

The decline will be to do with affordability and risk. Have you checked what appears on your three files? How does your income compare to the 12k loan?

The application doesn't affect your credit rating, but a search will show on your credit file. Too many may start to worry certain lenders.

hannahjaynexo

Thank you i didnt know that about your credit rating so thats helpful!
I pay myself £1250 a month wages into the account i applied for it through however its only money going into that account not out.
I have a business account that I pay around £2500-£2800 a month into which all of my outgoings come out of i.e my phone bill, car rent, business property rent etc.
I have only had the personal bank account for 6 months with santander, but my business bank account a lot longer.

hannahjaynexo

Also, what do you mean by three files?

[Deleted User]

The CRAs, where your credit files are held.

Experian (MSE Credit Club), Equifax (Clearscore), TransUnion (Credit Karma).

foxy-stoat

hannahjaynexo wrote: »

I pay myself £1250 a month wages

I suspect you will fail on affordability for a loan of £12,000 on this salary.

minnie123

your income needs to be your self employed profit not your self employment drawings - that's assuming you are a sole trader and not a Ltd company with a PAYE setup?

hannahjaynexo

My business is a limited company. I'm not sure how PAYE etc works as I have an accountant that does everything for me...

foxy-stoat

hannahjaynexo wrote: »

My business is a limited company. I'm not sure how PAYE etc works as I have an accountant that does everything for me...

You still wont be able to get a loan for nearly your net annual salary. Choose a smaller loan.

hannahjaynexo

even though the loan would be to pay off over 5 years?

MEM62

You are asking for a personal loan equivalent to almost 100% of your annual income. That isn't going to happen. Lenders will vary but 50% is often quoted as being the max that most are comfortable with.