Getting a loan or finance

[halbot]

Hi all

New to contracting and this forum so go easy

I switched from perm to contract a couple of months ago. I have only been paid once so don't have much saved up, and no savings otherwise (yes it was a risky move).

We are also about to do some building work on our house and somewhat short on funds, about 25k or so. So I need to borrow the money, and my ltd company doesn't have it so I can't take a directors loan. I can get 0% credit card advance of 9k but still short.

So, my question is, can I apply for a normal high street loan for say 20k, what sort of history will be required i.e. do they look at dividends/salary, or is there any way I can get a loan, only having been in a contract for a short time? How does this work normally if you are a director with a small salary taking dividends?

Obviously the sensible thing to do would be to delay the building work until I have more funds, but for one reason or another we need to start in the next month or so. I will be able to pay back 2k a month or so out of my dividends.

Thanks!

[northernladuk]

They will ask you your income. Dividends + salary is your income so you'll be fine.

I applied for a loan via Tescos who was the lowest at the time for around the same amount and had no problems. They may ask for evidence which will just be a mixture of your old and new forms of income.

The fact you are so new and probably don't have any solid evidence of PAYE and dividends may be a problem if they dig too deep but I can't remember them going in to it with my application. The good side is you've plenty of time at your old income to cover if that makes sense.

I'd say find the providor you want and ring them. I'd be a bit wary of applying in case you get refused and it affects your credit rating but I'm a bit anal about my rating hence I'd say call them first.

[northernladuk]

I'd echo the risk though. The hardest contract is the second one. You are on the clock with no income and are still pretty green. A few months on the bench with a 20k loan secured against your house is certainly not somewhere I would like to be.

[Lance]

Zopa loans – See rates & apply online | Zopa.com

[BlueSharp]

I was approved for Tesco's loan last week. All they ask is if your self-employed or employed, total monthly income and if you have any other loans, Balances on CC etc for affordability checks. As long as you have a strong credit rating and not much other debt you should be fine.