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Author:  sasha [ Wed Feb 22, 2017 6:15 pm ]
Post subject:  Loans

I'm looking to take out a loan for some home improvements (personal not business) and I'm a bit confused by one of the questions in the application. It asks for my annual income, before tax and deductions.

Do I put my total turnover income before I've paid costs like base rent, insurance, car repayments etc. Or do I enter the amount of profit - the amount I'm taxed on ?

ie. Lets say I take £30k but spend £13k on running costs, do I put the £30k total or £17k profit ? One thought is if I was in a 'normal' job earning £30k and then paying for cars, insurance etc totalling £13k you'd still declare your income as £30k, but another thought is my earnings are only £17k after the expenses.

I don't want to declare £30k to the lender only for them to find out my actual wage is £17k when I submit my tax statements, and on the other hand I don't want to say I'm on £17k and be rejected for the loan before even sending the returns ! Technically my income is £30k, but that's before expenses. :?

As an aside, for £10k what's best, a loan or remortgage ? Looks like there's more choices for a loan and easier to apply for, but less chance of being accepted due to self employment. A remortgage is more likely to be accepted, but less choice and harder to apply for :? :? Cost wise they're about the same.

Author:  grandad [ Wed Feb 22, 2017 6:55 pm ]
Post subject:  Re: Loans

Ask the lender which figure they want.
Taking out a secured loan or mortgage for home improvements is usually cheaper that any other loan.

Author:  Sussex [ Wed Feb 22, 2017 10:21 pm ]
Post subject:  Re: Loans

I would put your profit before tax.

I think that's the nearest we can get to an employed salary.

Author:  sasha [ Thu Feb 23, 2017 7:05 pm ]
Post subject:  Re: Loans

Sussex wrote:
I would put your profit before tax.

I think that's the nearest we can get to an employed salary.
That's my thinking, but the forms ask for my income - which obviously is higher than actual profit !

But;
Self-employed total income £30k, deduct running costs (car, insurance, fuel) = amount you declare on application.
Employed earning £30k, declares £30k on loan application but also has to pay for car etc.

They both start with £30k, only difference is the self employed deduct costs for the purposes of tax. So is the income the same ? :?

Author:  MR T [ Thu Feb 23, 2017 8:57 pm ]
Post subject:  Re: Loans

I can get 25k from Barclays at less than 4% unsecured

Author:  Sussex [ Fri Feb 24, 2017 7:46 am ]
Post subject:  Re: Loans

MR T wrote:
I can get 25k from Barclays at less than 4% unsecured

Good deal taking into account the chances of you being alive to actually pay it back. :shock: :shock: :shock: :shock: :shock: :shock: :shock: :shock:

Author:  MR T [ Fri Feb 24, 2017 12:06 pm ]
Post subject:  Re: Loans

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Sussex wrote:
MR T wrote:
I can get 25k from Barclays at less than 4% unsecured

Good deal taking into account the chances of you being alive to actually pay it back. :shock: :shock: :shock: :shock: :shock: :shock: :shock: :shock:

Author:  upnorth2016 [ Sat Feb 25, 2017 7:45 am ]
Post subject:  Re: Loans

Agree with Sussex, it should be what's on your tax return.

Be aware of course that a loan secured on your house means that in the event of default your house is more at risk.
Is there much difference in the actual monthly payments on a secured versus unsecured loan at the moment with all interest rates being so low?

Have a look at Martins Money website for comparison rates etc http://www.moneysavingexpert.com/loans/

Author:  sasha [ Sat Feb 25, 2017 6:16 pm ]
Post subject:  Re: Loans

The problem is I'm classed as a low earner, low enough to be claiming working tax credits. This combined with being self employed makes it harder to get a loan, any self employment is a risk factor to lenders.

The higher the income I can show the better chance of getting a loan, but the proof is the tax return (which they want the last three years of). I dont want to mislead them by putting the before profit income, likewise I don't want to put the lower figure down in case it lowers my chances, certainly if the higher figure is what they want !

Because of the low earning/self employment I'm more likely to be accepted for a secured loan, I know the repayments are'nt a problem, it's convincing the lender.

Author:  grandad [ Sat Feb 25, 2017 8:31 pm ]
Post subject:  Re: Loans

sasha wrote:
The problem is I'm classed as a low earner, low enough to be claiming working tax credits. This combined with being self employed makes it harder to get a loan, any self employment is a risk factor to lenders.

The higher the income I can show the better chance of getting a loan, but the proof is the tax return (which they want the last three years of). I dont want to mislead them by putting the before profit income, likewise I don't want to put the lower figure down in case it lowers my chances, certainly if the higher figure is what they want !

Because of the low earning/self employment I'm more likely to be accepted for a secured loan, I know the repayments are'nt a problem, it's convincing the lender.

The answer is simple. In fact it is in my first reply to your post. Just ask the lender which figure they want.

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