Need some loan advice, please

bazzyb · 6 November 2017 at 8:38AM

Getting a personal loan for 85% of your income is unlikely to happen, especially when you have existing borrowing. This would also significantly affect your ability to get the mortgage you are looking for with such a large unsecured debt.

As an aside, please let me know who has approved you for a loan already at less than 0% APR as I am very interested. £18k over 48 months even at 3.5% would be over £400 per month so I have no idea where you are getting your figures from?

DCFC79 · 6 November 2017 at 9:14AM

Lungboy wrote: »

I'd have thought an £18K loan on a £21K salary was unlikely, even without another loan on the go.

I completely agree.

StevenB12 · 6 November 2017 at 10:58AM

None are 0% Apr. My current bank Lloyd's will offer me it for 389 a month. Bearing in mind at the minute my only financial commitment as far as debt goes is my current loan , since this loan will pay off my existing loan you need to remember that again it's only going to be the one loan per month, yes I'll have two at the time of taking this one out but one will be getting paid off, that's why advisor at Lloyd's has approved it if I want to go ahead with it

To break it down my financial commitments currently per month are

Loan - 247
Rent - 200
Shopping - 100
Fuel - 100

On average at the end of every month I'm left with about 780/800 clear after bills. Wiping out the first loan I'm only going to be paying say an extra 150 , as I said since our wages are combined as to what is paid per month it makes it a bit easier

With my current loan and everything taking into account mortgage wise we are being offered up to 167K for the two of us.

Candyapple · 6 November 2017 at 12:34PM

StevenB12 wrote: »

None are 0% Apr. My current bank Lloyd's will offer me it for 389 a month. Bearing in mind at the minute my only financial commitment as far as debt goes is my current loan , since this loan will pay off my existing loan you need to remember that again it's only going to be the one loan per month, yes I'll have two at the time of taking this one out but one will be getting paid off, that's why advisor at Lloyd's has approved it if I want to go ahead with it

To break it down my financial commitments currently per month are

Loan - 247
Rent - 200
Shopping - 100
Fuel - 100

On average at the end of every month I'm left with about 780/800 clear after bills. Wiping out the first loan I'm only going to be paying say an extra 150 , as I said since our wages are combined as to what is paid per month it makes it a bit easier

With my current loan and everything taking into account mortgage wise we are being offered up to 167K for the two of us.

If you take out an £18k loan and are looking to apply for a mortgage in the near future, that amount will most definitely affect your affordability calculations and how much the bank would be willing to offer.

Have you actually spoke to a mortgage broker and run the figures through with them?

If you are looking at taking out a £18k loan and £6k of that will be used to clear your existing loan, is the remaining £12k to be spent on a car? Can you not lower your expectations and go for a cheaper model?

Herzlos · 6 November 2017 at 12:40PM

If you're looking at getting a mortgage, I'd be spending a lot less on the car* (£4k rather than £12k). I'd probably also take it from the savings rather than borrowing for it, since presumably you're putting your spare £800/month into savings, it means you'll be back where you started in 5 months.

I can't understand how with a £2k balance you've got a £6k settlement figure. That's pretty much the remaining payments. Did you get a settlement figure from the loan provider? What kind of loan is it?

*Or keeping your current car until you've bought the house and settled in financially - houses cost so much more than just the mortgage.

StevenB12 · 6 November 2017 at 1:36PM

Basically when I got my first loan it was for this car and a bit of work to the house and a holiday , it's my cousins house that we currently rent but about a week after I got the loan he decided to sell but has gave us about 2 years from now more or less to get a mortgage sorted , I've also gone into a better paid job since but my current car has poor mpg as all this was bought and done before job change etc , any car I get now I'm looking at paying more as I want a newer car that's going to last a good 7/8 year at least .

As for the loan the loan was for 7.5K but it was paying back almost 11/12K like I said it was a first time loan so I had no credit history virtually before this so it was high interest , I've basically paid 5/6K back and the remaining balance is 2 years worth left

StevenB12 · 6 November 2017 at 1:43PM

The mortgage advisors I've spoke to have gone over what my monthly costs are currently and what I make , like I said my basic salary is 21K but overtime can bump that up to 23/24K a year. So as before let's say Max I get this loan and I pay 400 per month back , my monthly costs are going to be about 700 per month that's for loan , shopping etc , that leaves me with about 700/800 spare, pus my other half's income which is anywhere from 1200/1300 so round it to £2000 left a month, the mortgage we were offered was 640 a month with 11K going as a deposit , the entirety of household bills for everything that was worked out came to about 440 which was leaving us about 930 or so a month clear

StevenB12 · 6 November 2017 at 1:46PM

I'll add the 440 was not including shopping, but covered gas, electric, home insurance and the rest

Candyapple · 6 November 2017 at 1:57PM

StevenB12 wrote: »

The mortgage advisors I've spoke to have gone over what my monthly costs are currently and what I make , like I said my basic salary is 21K but overtime can bump that up to 23/24K a year. So as before let's say Max I get this loan and I pay 400 per month back , my monthly costs are going to be about 700 per month that's for loan , shopping etc , that leaves me with about 700/800 spare, pus my other half's income which is anywhere from 1200/1300 so round it to £2000 left a month, the mortgage we were offered was 640 a month with 11K going as a deposit , the entirety of household bills for everything that was worked out came to about 440 which was leaving us about 930 or so a month clear

That's all well and good, but have you actually asked your broker what the bank would lend you if you took on this new £18k loan?

The new mortgage affordability checks stress test you based on interest rates going up to 8% so yes whilst you are saying currently you would have £930 spare, if you don't pass the affordability checks, you won't be able to get a mortgage.

http://www.telegraph.co.uk/personal-banking/mortgages/bank-england-tightens-mortgage-rules-means/

I'm actually quite surprised Lloyds have said they would be willing to loan you £18k when you currently only earn £21k and already have £6k left on an outstanding loan. Granted you said you are going to clear the outstanding loan debt, but the bank don't know that, and they are willing to give you £18k unsecured loan!

If you do go ahead with the bank application, can you please post back here what APR they gave you and how much the final amount was for please as it will be helpful for others who may find themselves in a similar situation.

StevenB12 · 6 November 2017 at 2:05PM

They've got the guarantee that I'll be paying off the other loan as I have to do it on then phone from Lloyd's in advisors office haha. No as said with the mortgage the way the broker went over it with me it's lot the overall level of the loan that gets looked at its just your monthly affordability for the mortgage it's self and bills. They rent looking at it as being 18K , they're looking at it as 400 or so a month rather than an overall fee, hence with it being a joint mortgage the overall costs so far on about £1100 for mortgage and bills, leaving about 800 or so a month spare since its a joint application , that's why he explained that they look at monthly affordability and not the actual sum of the loan, obviously I'm assuming there will be exceptions for larger loans that's why most are capped at the 25K Mark

Need some loan advice, please

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