Self-employed on a low income needs a loaned £3-4k buffer cash to be repaid within 2 years

Ajax67

Hi everyone. I am a single, childless window cleaner. I live in a rented room in a house of multiple occupation and my average monthly income (after NI and zero income tax) is about £860. I have a credit card with a £2,100 credit limit, but I need access to about £3-4k more. I tried to borrow the money via Nationwide, but in my online quotes, I was warned that if I applied for any money at all, I would be most likely rejected because of my insufficient income. Can you recommend someone who will lend me £3-4k on a 2-year monthly instalment plan with an annual interest rate lower than 60 per cent? Thank you!

HeinzVarieties

Probably no-one.

You realistically don't have the income to service any debt at all so nobody should be offering to lend you three quarters (I'm assuming "I need 3-4k more" means you'll also take whatever you can get off the credit card) of your annual salary over 2 years.

If this is about money to live off see https://www.entitledto.co.uk/ to see if you're entitled to any benefits. If it's about buying something you probably don't need, don't buy it.

Ajax67

My annual salary after NI and tax is about £10,300. So the amount I need to borrow is much lower than half of my annual salary.

HeinzVarieties

Ajax67 said:

My annual salary after NI and tax is about £10,300. So the amount I need to borrow is much lower than half of my annual salary.

£2k+ £3k = £5k which is half.

£2 + £4k = £6k which is more than half.

You can't afford to service this debt either way.

Ajax67

I have mentioned that I need the money as buffer cash. I won't necessarily need to use my credit card limit. It's more about access to cash than about having it on my current account and owing it at the same time.

HeinzVarieties

Ajax67 said:

I have mentioned that I need the money as buffer cash. I won't necessarily need to use my credit card limit. It's more about access to cash than about having it on my current account and owing it at the same time.

Which is insane.  Borrowing and paying interest on money you don't even know you need is insanity.

Build up a buffer through saving, not debt.  If you can't afford to build up a buffer through saving, you can't afford to service a debt.

Ajax67

Well, to be more understood, I will describe my situation a bit better. I have about £15,000 savings and I want to use a big part of it for buying some new window cleaning equipment. But if I do it, I will have almost no cash left. Therefore I need access to some more money.

HeinzVarieties

Ajax67 said:

Well, to be more understood, I will describe my situation a bit better. I have about £15,000 savings and I want to use a big part of it for buying some new window cleaning equipment. But if I do it, I will have almost no cash left. Therefore I need access to some more money.

You don't need access to more money, you need to save more money.

Borrowing money for a rainy day scenario is, again, insane.  Savings are just that, savings. You don't build up emergency funds through debt.

Ajax67

Not to mention that after buying the new equipment, I expect to increase my productivity by about 50 per cent. But if no one lends me or issues me with new credit cards, I will have to work with my low productivity equipment for 1-2 more years, and to do more hours every week than up to now.

MalMonroe

I agree that no sensible lender will be obliging enough. Your income is small and you are self-employed. 

I learned the very hard way that more credit is not the answer. 

What you need to do is work out your income and your outgoings. It won't be helpful to publish it here because I doubt anyone would encourage you to make any applications for more credit. BUT it will help you to see how much disposable income you have and you could put all that into a savings account for two years instead of attempting to take on debt. That time will fly!

Believe me, I know from sad past experience that closing your eyes, burying your head in the sand, ignoring people who know their onions and hoping for the best just does not work when it comes to money. 

I agree with Heinz, above, have a look to see if you are entitled to any benefits, or contact Citizens Advice to ask. You may be pleasantly surprised. For example, people on low incomes can be entitled to help with health costs which is good for cutting dentist and optician costs.

Also, I DO hope that, as a window cleaner, you have some insurance to protect any income lost if you have any accident (not that I'm saying you will but it's definitely what I'd call a dangerous occupation). Better to be safe than sorry. 

HeinzVarieties

Ajax67 said:

Not to mention that after buying the new equipment, I expect to increase my productivity by about 50 per cent. But if no one lends me or issues me with new credit cards, I will have to work with my low productivity equipment for 1-2 more years, and to do more hours every week than up to now.

If your income goes up, you can replenish your emergency fund faster.  If it does not, you at least won't be saddled with an unserviceable debt.