Below is the income criteria for just one of our lenders on one of the plans. We have hundreds of plans and dozens of lenders. This is why a comparison site can't ask a few questions and give you a quote for a secured loan. It is impossible until as the FSA puts it "they know their client properly".
a) Employed Applicants
Applicants must be UK based and income received in UK £ sterling
Where the LTV is 75% or over, applicants must have been employed for at least 12 months
For the purpose of affordability, detailed below are acceptable types of income
100% of basic salary and 100% of all bonuses, overtime and other declarable income for tax purposes
Statutory Maternity or Paternity pay will NOT be considered
Any court order deductions, student loans or other attachment of earnings will be taken off allowable income
Seasonal, piece work, temporary or agency employed applicants’ incomes will NOT be taken into account as acceptable income
2nd Job income will be taken into account provided we have acceptable proof as below and the applicant has held the 2nd job for a minimum of two years
Employed applicants must supply:
Original payslips are required in all cases - 2 most recent monthly or 3 most recent weekly payslips
Monthly payslips must be dated within 6 weeks of completion and weekly, dated within 3 weeks at completion
If payslips are internet based, original bank statements will be required to show the payment being credited
Where sick pay shows on most recent payslip further confirmation from employer must be obtained that clients have returned to work on full pay
Applicants must be employed for a minimum of 3 months in their current role and a job contract will be required if employed for 6 months or less at application stage
P60 or employers reference will be required if payslips are handwritten
Where an applicant cannot provide proof of all employed income e.g. ‘cash in hand’ income this must be supported by a completed Income Affordability letter and 2 months bank statements showing evidence of the income. N.B. A 5% reduction in the maximum LTV will also be applied in this instance.
b) Self Employed Applicants
Sole traders, sub-contractors and those holding 25% or more of the issued shared capital of a company will be deemed to be self employed. Minimum time self employed is 1 year unless accounts certificates certificate is required, the applicants will need to be self employed for at least 3 years.
Considered on all plans with a 5% reduction in maximum LTV allowed for Link 1 and 10% reduction on Link 2-5.
100% of net profit figure and 100% of all dividends, share of profits and other declarable income for tax purposes. If o/t and bonus/commissions exceed 20% of gross monthly income then case should be referred.
A self employed declaration will be required in all instances and must be signed by all parties to the loan.
Self Employed applicants must also supply either:
- 2 months most recent original bank statements
- Certificate completed by qualified accountant.
- Certificate covering 3 full years of trading plus a projection if latest accounts are not filed in the last 3 months and 2 months most recent business bank statements are required for all loans in excess of 55% LTV
c) Other types of Income
The following types of income are acceptable:
Child and working tax credits
Pension income, including state pension and pension credit
Incapacity benefit
Disability living allowance and severe disability allowance
The most recent original annual statement or entitlement letter will be required for each type of income being received along with 2 months most recent original bank statements showing the payments being received.
Maintenance income - supported by court order documentation and 2 months most recent bank statements showing payments being received
CSA income – supported by 2 months most recent bank statements showing the payments being received
The following types of income are not acceptable:
- Child benefit
- Income support
- Housing benefit/DHSS assistance with first mortgage repayments
- Job seekers allowance
Carers allowance
- Foster care allowance
- Seasonal, piece work, temporary or agency employed applicants
- Income from 2nd properties (rental)
Benefits being received on behalf of anyone other than the applicants
Attendance allowance
Bursaries
6) Affordability Calculations
Debt to income ratio to be used on total gross monthly earnings from gross to date or average of the latest two payslips, whichever is lower using the following method: (unsecured debt not being consolidated to be included in calculation)
40% where income is £25,000 or less
45% where income greater than £25,000
* Broker fees/lender fees will be taken into account for budget purposes
When assessing unsecured credit, any adverse points for mail order and communication suppliers’ accounts may be ignored.
N.B. Mail order, communication supplier balances and current accounts will be included in affordability calculations - balances will be calculated as per credit cards.
Credit card payments will be judged as 3% of outstanding balance.
Any cards partially cleared from advance will be judged as 3% of remaining balance.
Any outstanding defaults regardless of age and amount are to be classed with a monthly payment of 3% of balance. Any CCJ within the last 3 years will be included and the payments will be judged as 3% of outstanding balance.
When any accounts claiming to have been settled are still showing as live on the credit search, either a new search showing the account as settled or confirmation in writing from the relevant company will be required
Where credit is to be consolidated, applicants must complete a credit details sheet confirming the information for each item to be cleared. Any items of credit added to the sheet which are not already showing on the credit search will also be taken account of in the debt to income calculations.
Any Buy to Let mortgage payments will be included in any affordability calculations. A legal search and credit search for the address will be required in all instances
LOANS MAY BE SECURED ON YOUR HOME.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
Most customers pay 14.5% APR typical variable or less.
Rates from 9.0% APR variable to 21.7% APR variable our highest rate is for customers with severe credit problems.
Loans subject to status. Calls may be recorded for training purposes.
A broker fee between 0% and 10% may be charged. On average this amount is £960.
Please be aware that Loan.co.uk do not give advice or arrange any credit. All enquiries are passed on to our panel of brokers and lenders.