Self Employed - Wanting to get a loan.

[puffin]

Hi Guys,

I am self employed, and I am wanting to get a loan around this time next year.

By that point, I will have worked for just over a year.

I know this is a pretty vague and nieve question, but how easy is it to get a loan when self employed?
I have heard mixed things..

I'm 21, would be 22 this time next year, I have no bad credits, no CCJ etc..

The loan would not be for business purposes, just my own personal use.

Thought this may be the best place to shed some light on this.

Thanks

Regards

 

[danielmeade]

If you have nothing against you and can prove that the loan is not for business purposes then I'd expect you wouldn't find it too difficult. As long as you are putting at least £1000 per month into your personal bank account, most banks would be willing to lend.

 

[puffin]

If you have nothing against you and can prove that the loan is not for business purposes then I'd expect you wouldn't find it too difficult. As long as you are putting at least £1000 per month into your personal bank account, most banks would be willing to lend.

It certainly won't be for business use.

I am wanting to purchase a restoration property abroad, I will have a good deposit, and would be wanting a loan of around £20k.

This property is not to sell, this is for my partner and I, a holiday home/permanent home haven't decided yet.

£1000pcm is more than covered.

Thanks for the info daniel.

 

[Newcott]

Do you have exisiting credit? not having that can be just as bas as defaults ect...

If not might be worth gettnig a small credit car - use it to by lunch once a week or something then pay it back in full on time each month - when the time comes around to get the loan you'll have 12 months of healthy credit

 

[puffin]

Do you have exisiting credit? not having that can be just as bas as defaults ect...

If not might be worth gettnig a small credit car - use it to by lunch once a week or something then pay it back in full on time each month - when the time comes around to get the loan you'll have 12 months of healthy credit

I dont own a credit card no.

Thats a good shout, is that the way they look at things?

 

[Newcott]

Speaking out of personal experience so someone correct me if I'm wrong.

The lender will want to credit score you, if you have no credit then you will have 0 score which they will do a "Computer says no" moment.

Its a bit ironic that you need credit to get credit.

Things like mobile phone if its on contract will help but you'll need to build up your score to get the best possible rate for your load/get a loan all together.

As mentioned if you can get a small credit card, spend a small ammount each month and consistently pay it back without fail when due then you will increase your credit - by the time next year roles around on your account they will see 12 months worth of good credit.

Might be worth looking at getting a CreditExpert report to get a understanding of where you stand.

 

[puffin]

Speaking out of personal experience so someone correct me if I'm wrong.

The lender will want to credit score you, if you have no credit then you will have 0 score which they will do a "Computer says no" moment.

Its a bit ironic that you need credit to get credit.

Things like mobile phone if its on contract will help but you'll need to build up your score to get the best possible rate for your load/get a loan all together.

As mentioned if you can get a small credit card, spend a small ammount each month and consistently pay it back without fail when due then you will increase your credit - by the time next year roles around on your account they will see 12 months worth of good credit.

Might be worth looking at getting a CreditExpert report to get a understanding of where you stand.

Hi
Thanks again.

Yeah that is probably worth a thought.
Could do my petrol each week.
Hmm.

 

[Rasta Pickles]

Go through somewhere like HERE and if it tracks you'll get a bit of cashback as well as an added bonus

 

[VeraJ]

No chance of getting a £20,000 loan based on what you have said.

It certainly won't be for business use.

I am wanting to purchase a restoration property abroad, I will have a good deposit, and would be wanting a loan of around £20k.

This property is not to sell, this is for my partner and I, a holiday home/permanent home haven't decided yet.

£1000pcm is more than covered.

Thanks for the info daniel.

 

[macmanusassetfinance]

Personal loans arent our bag but the credit process follows the same fundamental steps in business and personal lending.

I put together a post on our blog a while back containing some tips on building and maintaining a good credit score. You can read it here

I would say from my own experience is that securing loans for anyone who is not a homeowner, certainly for a reasonable sized loan of £20,000 is very difficult.

The two watch words for a lender are security and serviceability. Security - what can the loan provider "get hold of" to get their money back if you stop paying. Serviceability - can you afford the repayments you would need to make.

Hope this helps.

 

[Alby10]

Hi Guys,

I am self employed, and I am wanting to get a loan around this time next year.

By that point, I will have worked for just over a year.

I know this is a pretty vague and nieve question, but how easy is it to get a loan when self employed?
I have heard mixed things..

I'm 21, would be 22 this time next year, I have no bad credits, no CCJ etc..

The loan would not be for business purposes, just my own personal use.

Thought this may be the best place to shed some light on this.

Thanks

Regards

Some good advice provided by others on this thread.

I used to own a finance company up until about three years ago. so i know a little bit about this...


In response to your question, unfortunately you will have two problems in the current financial climate, if you are looking for a personal loan.

1) Your self employed - unfortunately one of the problems caused by the recent banking crisis is the provision of loans to those who are unable to substantiate their income, i.e. self-employed. Many of the banks have changed their criteria to such an extent that unless you have undeniable proof of income, such as payslips, you may well struggle.

2) Your age - being 21, you are considered by many lenders to be a much higher risk than any individual who is in their 30s, with a family and a mortgaged property. This may not be the case, however all lenders utilise a variety of risk assessment models, and base their criteria on these risk assessments.

In essence, a personal loan, is a risky venture for any particular lender, as there is no particular security provided.

Considering that the loan is for a property abroad, you may want to consider reviewing the range of UK-based lenders that offer property finance, and mortgages for overseas property.