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When some people apply for a secured loan, there can be a slight concern about the type of income that lenders will accept, especially if it doesn’t all come from ‘traditional’ sources.
Legitimate monthly income can be generated in lots of different ways and lenders often try to be as flexible as possible when it comes to the affordability part of the process.
So, whether you want to include lodger rent, maternity pay or cash-based income for review, we’ll attempt to set the records straight in this article.
If you are a landlord that receives rental income from your property, this can be included for assessment. Lenders usually ask you to provide evidence that the income has been declared with HMRC, so you will need to submit the relevant documents for it to be eligible.
There are lenders that accept applications from borrowers who want to use lodger rent to contribute to their loan repayments.
A lodger is classed as someone who rents a room in your home and shares living space, such as the kitchen and bathroom.
There may be a limit on how much of the income you can use, and the lender may ask you to submit a copy of the tenancy agreement along with recent bank statements.
Get in touch with the Willows team and we can tell you more about how using lodger income for your loan works.
Using income from an investment can usually be accepted by a lender. All you need to do is provide the relevant tax documents and meet the other parts of the eligibility criteria.
When it comes to trust fund income, this tends to be assessed slightly differently by lenders, so it usually requires a referral.
Applying through a specialist lender could increase your chances of being accepted, as they will have the experience and know-how of dealing with this type of income.
Employees that are given extra money by their employers to buy, lease and/or cover the cost of running the car can declare this as a form of income.
All you need to do is provide the secured loan lender with the required number of payslips that show how much car allowance you are given each month or year.
This is also true of any shift allowance you may receive from your employer for working unusual shift patterns or unsociable hours.
Most lenders will accept this type of income and simply ask you to provide payslips that state the relevant information.
If you need more clarity on how all of this works, you can speak with one of our expert advisors to find out more.
Most lenders will accept bank nursing pay and Attendance Allowance, so you will just need to supply the requested documents that confirm your income details.
Bank nursing is essentially the same as working on a zero hours contract, as you undertake periods of work with an NHS employer, with no long-term commitment from either party.
Secured loan lenders generally accept applications from people working on zero hours contracts as long as you can demonstrate that the income is consistent.
You may find it helpful to speak with one of our advisors about your situation if you receive bank nursing pay or attendance allowance, as this can make it easier to match you with the right lender.
This works in a similar way to car allowance and shift allowance submissions.
Most secured loan lenders are happy to assess this as a form of income if you can supply recent payslips that include this information.
London Weighting is awarded to teachers, airline employees, PhD students, police and security officers to support the cost of living in certain parts of Inner and Outer London.
Large Town Allowance is a discretionary payment made by employers to workers who live in a more expensive part of the UK.
Getting a quote won’t affect your credit score
Anyone on maternity, paternity or adoption leave can apply for a secured loan and include the income for assessment.
Depending on the lender’s criteria, they may ask you to provide a copy of your employment contract (or another form of written confirmation).
You may also need to confirm your date of return to work and pay details so your annual salary and overall income can be adjusted.
While some lenders may be hesitant to accept cash income, there are some that are willing to consider it as part of your application.
Being paid in cash means your money is given directly to you, rather than being sent through a bank. Your employer will still be responsible for ensuring your taxes and National Insurance contributions are processed in the correct way.
So, provided your employer adheres to this system (known as PAYE – Pay As You Earn) then some lenders will review your income just like any other. If further evidence is needed, you may be asked to submit things like a reference from your employer, recent bank statements and relevant tax documents.
We’re extremely proud to be rated ‘Excellent’ for our service standards. We’ve helped thousands of customers across the UK over the last 15 years to find the right finance for their needs – no matter how complicated the circumstances. And we look forward to helping you.
With so many loans and deals available on the market, it can be hard to know if you have covered every angle and found the best possible rates. Willows can remove some of those worries because we do the hard work for you, searching the market to find the most suitable deals based on your exact circumstances. If you receive extra income from overtime, commission, or a second job, our Additional Income Guide will be a valuable resource.
Our friendly team of brokers are on hand to answer any questions you have about getting a secured loan if you want to use other forms of income for your repayments. You can get in touch with them today by calling 01656 766 158 and they’ll be more than happy to help.
If you have a question – we’d be happy to talk to you – simply call us…
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