Unsecured loans...

Steven is applying to get an unsecured loan to purchase a car and am wondering if there is a formula they use to decide how much you can borrow?

I know for mortgages its usually 2.5 x your salary.

Unfortunately, they will not count my salary, because I haven't been here for three years, so its just Stevens.

We really want a car!!!

Depends on the lender.  Mortgages range from 2x to 4x salary, it is the same with other loans.

Vicky

To be honest I am not sure how they decide how much you can borrow but after living here for a little over a year I had an unsecured loan in my name.  I did not even have an ILR.  I purchased a car with it.  I never have had a problem with getting credit.  Why do you have to wait till three years?  Is that what your bank is saying? 

To be honest I am not sure how they decide how much you can borrow but after living here for a little over a year I had an unsecured loan in my name.  I did not even have an ILR.  I purchased a car with it.  I never have had a problem with getting credit.  Why do you have to wait till three years?  Is that what your bank is saying? 

Well, not only my bank, but another well known mortgage lender.  It said you must be a UK resident for three years before they will consider you.

Again, every lender differs.  You need to shop around.

Vicky

We just got a mortgage and I still do not have my ILR and they did not even ask about my visa status.  Have you tried other banks and companies?  Because really I never once had a problem. 

Would you mind pm'ing me with the company you got the loan from so I can look them up?

I'm not sure how long you both have been customers of your bank, but they might be able to give you a revolving line of credit with a decent interest rate based off of your combined income and general credit.  We did this with Barclays without any sort of hassle, as the 10.5% interest rate was more favourable than any other option we had.  I don't remember any sort of complicated applications process, but then again, DH has been with them since the sometime in the late Pleistocene. 

DH got the letter today and he's approved for the loan, but the rate is 10.9%.  Doesn't this seem a bit high?

I guess because he's never really had credit before this is why.  ?

If you don't have much of a credit history, typically your rate on anything (Credit card, loans, etc) will be higher than someone who can prove established credit. Usually they try to get you to have a cosigner that does have a good credit history, as that would lower your interest rate.

Make sure to shop around for the best rate.  Halifax advertised a low 6% rate but would only offer me 10% rate after I applied, even after having a prior loan with them and even though they hold my current account with pay direct deposits.

Alliance & Leichester (sp?) offered me 6% even though I have no dealings with them.

Try moneysupermarket.com or some similar site