Let’s Talk Income?

When it comes to securing a loan, lenders want to make sure you have the financial stability to pay it back. So, what’s the deal with income?

Whether you’re an employed superhero or a self-employed wonder, they’ll want to take a look at your income. This will affect the type of income proof they’ll ask for and how they’ll determine your available income.

Here’s a little inside info: most secured loan lenders will take a look at your gross annual income and multiply it by 6 or 7 to get a rough estimate of how much you can afford to borrow. For example, if your family earns a gross income of £50,000 per year, you could potentially borrow up to £350,000 in total between your first mortgage and a second charge.

So, in short, income is a crucial factor in securing a loan, and it’s good to be prepared to share the details of your financial stability. And who knows, you may surprise yourself with how much you can borrow and how cost-cost it could be!

I am employed – what do I need to know?

When you’re applying for a secured loan, lenders want to make sure that you’ll be able to repay the loan comfortably and on time. This is why they take into consideration several factors, including your job security. They’ll want to know if you’re in a probation period or have recently changed jobs or careers, as this could impact your future income.

When it comes to proof of income, having 3 months’ recent payslips or a P60 readily available will help support your application. Additionally, if you have any additional sources of income, such as bonuses or commissions, it’s a good idea to let the lender know. Some lenders may only consider a portion of your bonus pay if it’s not guaranteed, so it’s important to have a clear understanding of the lender’s criteria and requirements.

In general, the lender will be looking for consistency of future income, which is why having a stable job is a key factor in securing a loan. It’s important to keep in mind that different lenders may have different criteria and calculations, so it’s worth shopping around to find the best option for you.

Show Me the Money: Proving Your Income as a Self-Employed Borrower

Being your own boss is a thrilling ride, but when it comes to securing a loan, it can be a bit more challenging. Don’t worry, we’ve got your back! Here’s what you need to know about proving your income as a self-employed borrower.

Lenders generally look for self-employed borrowers who have been in business for at least 12 months and can provide proof of income. This may include documents like a SA302 or accountants certified tax calculations, as well as recent company bank statements.

It’s worth noting that if you own more than 25% of a company, you might be considered self-employed, even if you receive a PAYE salary. So, be prepared to factor this into your loan application and have all your documentation ready to go!

How do Lenders look at My Expenses?

When you’re considering taking out a secured loan, lenders will take a closer look at your finances to determine what you can afford. This includes not just your income, but also your monthly expenses.

To calculate your affordability, the lender will subtract your monthly expenses from your income. These expenses include your mortgage payment, credit card bills, loan repayments, and other necessary expenses like car payments, energy bills, school fees, and your general living expenses.

To determine your general living expenses, lenders may use the ONS data, which is the government’s official data on household expenses, or they may use an estimate based on the information you provide.

It’s important to be as accurate as possible when providing information on your expenses, so that the lender can get an accurate picture of what you can afford. But don’t worry, being a bit off on the exact numbers won’t make or break your loan application. Lenders understand that expenses can vary from month to month and they just want to get a general idea of your financial situation.

The goal is to find a loan that you’re comfortable with and that fits your budget, so be honest about your expenses and work with your lender to find the best solution for you.

How do I consolidate other loans and credit cards?

Consolidating your high-interest debt can be a smart financial decision. Secured loans are a great option to consider if you’re looking to simplify your monthly payments and potentially save money on interest charges.

When you apply for a secured loan, the lender will want to know the details of the debt you’re looking to consolidate. This means you’ll need to provide the current settlement figures for each loan or credit card. This information will help the lender determine the amount of money you need to pay off your debt and create a new loan payment plan for you.

The process of debt consolidation through a secured loan can be straightforward, and it can give you peace of mind by simplifying your monthly payments and potentially reducing the interest charges you pay. With one manageable monthly payment and a lower interest rate, you can focus on paying off your debt and reaching your financial goals.

This way, you can say goodbye to multiple payments each month and hello to a clearer financial picture.

What about my credit score?

If you’re thinking about getting a secured loan, you might be curious about how your credit score fits into the equation. Good news! A solid credit score is always a plus, but it’s not a deal breaker. Our friendly and knowledgeable financial advisors will work with you to determine the best option for your financial situation.

Whether you have a great credit score or it could use some improvement, don’t worry, we’ve got you covered. Let’s work together to find the solution that’s right for you!