Salary Finance

Superhoopza

I seen a few threads made about it but no real discussion around it. To summarise

It's a loan company that provide loans to employees of companies that are signed up to them. It's not a salary sacrifice, just your loan repayments come out of your salary. They claim to offer higher acceptance rates, even people with poor credit history, at far lower interest rates.

I am looking to get a debt consolidation loan but have two queries I'd like advice on. Firstly, if my repayments come out of my salary, will that make other creditors think that I've had a salary reduction and tighten their squeeze on my credit (for the ones I couldn't use the consolidation loan to pay off)? I don't have open banking with any of them except updraft but I'm sure they have ways to validate income?

Second question is, I made my final payment to another loan provider in January. I'm checking my various credit report providers to see if that loan has now been removed from my outstanding accounts but as of yet, it has not. This leaves still two loans on my credit report. Am I better off waiting for this to drop off my outstanding accounts before applying, to boost my chances of success in being accepted for this salary Finance loan?

I understand there are more complexities than just that, but do them two things have a factor?

Thanks

y3sitsm3

Lenders don't have any way to validate your earnings other than requesting payslips/bank statements and that is very rare with unsecured lending, and practically unheard of for existing lines of credit.

Even if they did, if you're looking for debt consolidation I'd argue that them cutting your limits is hardly a bad thing.

I don't think your loan being paid off will make the blindest bit of difference, it'll show as practically paid off anyway, and if you're truthful about the reason for applying then the outstanding debt is probably going to be a pass/fail anyway, a couple of hundred quid or so won't change anything.

Ebe_Scrooge

Well their website instantly makes me cringe with their frequent references to "improving your credit score".

That aside ... I suspect they're able to offer better terms than other sub-prime lenders due to the fact that they're fairly certain of getting their money back, so long as you remain employed.

Superhoop91 said:

Firstly, if my repayments come out of my salary, will that make other creditors think that I've had a salary reduction and tighten their squeeze on my credit

No.  You gross salary remains the same, it's your net pay that will be reduced.  But other creditors will be aware that you have a loan with this company, so will factor that into their lending decision.

Superhoop91 said:

Second question is, I made my final payment to another loan provider in January. I'm checking my various credit report providers to see if that loan has now been removed from my outstanding accounts but as of yet, it has not. This leaves still two loans on my credit report. Am I better off waiting for this to drop off my outstanding accounts before applying, to boost my chances of success in being accepted for this salary Finance loan?

Probably yes.  It can take a while for updates to filter their way through to the CRA.

Superhoop91 said:

I am looking to get a debt consolidation loan

Consolidation loans are rarely a good idea.  For one thing, you're not getting rid of the debt, merely moving it from one place to another.  Unless you address the cause of the debt, you run the risk of running into an ever-spiralling debt situation.  For another thing, affordability checks can become an issue.  A lender can't guarantee you'll use the new loan to repay existing debt, they have to take the worst-case view that the new debt will be in addition to existing debt, effectively doubling your debt.  This means you have a lower chance of being accepted, and probably a higher APR (if you are accepted) than you would otherwise be offered.

Superhoopza

Thanks for the opinions. Aware yes that I will probably be on their higher end of their APR if accepted but their higher end of 19.9% is still lower than all my forms of credit. My debt situation is reducing each month, I just want to lower the interest on it with cheaper finance. Then also my card utilisation will be lower, giving me the chance of getting 0% credit cards that can help me then pay off these loans quicker, saving again on interest.

y3sitsm3

Superhoop91 said:

Thanks for the opinions. Aware yes that I will probably be on their higher end of their APR if accepted but their higher end of 19.9% is still lower than all my forms of credit. My debt situation is reducing each month, I just want to lower the interest on it with cheaper finance. Then also my card utilisation will be lower, giving me the chance of getting 0% credit cards that can help me then pay off these loans quicker, saving again on interest.

To be honest this sounds like an insolvency in the making.

Superhoopza

Thanks for your not so useful post

y3sitsm3

Superhoop91 said:

Thanks for your not so useful post

It's plenty useful, it's just not what you wanted to hear.

Many consolidation attempts fail because the root cause of the issue is not addressed, and having lines of credit available means they get spent on, and the debt increases and increases.

Trying to juggle the debt over 0% cards to boot just increase the risk of it all going breasts up.

Superhoopza

As an FYI, due to them having an eligibility checker, I got offered £10,000 at 9.9% APR, made a full application, got offered it and paid into my bank account. All within an hour. I've calculated that this should support me being debt free at least two months quicker as well as the perks of improving my credit report. This was far better than any eligibility checker was offering and I would advice anyone that needs to use it to genieunely improve their situation, look at this over other more expensive financing options.

y3sitsm3

Superhoop91 said:

As an FYI, due to them having an eligibility checker, I got offered £10,000 at 9.9% APR, made a full application, got offered it and paid into my bank account. All within an hour. I've calculated that this should support me being debt free at least two months quicker as well as the perks of improving my credit report. This was far better than any eligibility checker was offering and I would advice anyone that needs to use it to genieunely improve their situation, look at this over other more expensive financing options.

The better solution to debt issues is to work out a plan to repay it rather than shuffling it around.

Superhoopza

y3sitsm3 said:

Superhoop91 said:

Thanks for your not so useful post

It's plenty useful, it's just not what you wanted to hear.

Many consolidation attempts fail because the root cause of the issue is not addressed, and having lines of credit available means they get spent on, and the debt increases and increases.

Trying to juggle the debt over 0% cards to boot just increase the risk of it all going breasts up.

Whilst that will be try for some people, it is not me. I have fixed the reason why I got I to this situation in the first place and have been reducing my debt down for the past 12 months, I just wanted to now excelerate the process. Please maybe ask a question or two before you throw heavy judgements around.

Superhoopza

y3sitsm3 said:

Superhoop91 said:

As an FYI, due to them having an eligibility checker, I got offered £10,000 at 9.9% APR, made a full application, got offered it and paid into my bank account. All within an hour. I've calculated that this should support me being debt free at least two months quicker as well as the perks of improving my credit report. This was far better than any eligibility checker was offering and I would advice anyone that needs to use it to genieunely improve their situation, look at this over other more expensive financing options.

The better solution to debt issues is to work out a plan to repay it rather than shuffling it around.

Or if you can reduce interest by finding financing alternatives, then maybe do that as opposed to paying more interest to other providers.