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- In Bee Savvy - Getting the most out of your loan, Tricks of the trade - how banks fool borrowers, Why use a broker - what we can do for you
Many people try to work out if they will be approved for their loan by subtracting their current expenses from their take home pay, and using online calculators to determine their proposed repayments for their new loan.
But what many people don’t realise, is that banks may not agree with you as to how much you actually earn or how much your expenses are.
Most banks will factor in 3% of your credit card LIMITS (not amount owing nor actual repayments listed as your minimum monthly on your credit card statement); they will also factor a minimum interest rate for your loan that you must demonstrate that you can pay before your loan will be approved.
This can be for example 7.25% for a loan with an interest rate of 4.30% and will vary amongst lenders.
If you are wishing to include rental income, this is usually factored in as 80% of actual repayments received.
Recent changes in bank policies brought on by pressures from the APRA to increase barriers to lending, can see some rental incomes taken at even lower percentages than this or even excluded entirely in some cases!
Your income may also be put under scrutiny depending on whether you are including overtime, allowances, bonuses or commissions.
This will vary from lender to lender depending on how long you have been in your job for and how you are able to prove the consistency of your income.
As you can see all of these factors make it virtually impossible for you to calculate your own borrowing capacity, even with the help of online calculators.
If you want to avoid being disappointed with your borrowing capacity after submitting an application, speak to us upfront as we can match your income with a lender that will consider it most favourably, and assist you in getting the most out of your desired loan without applying aimlessly but with well planned well thought out consideration to get you where you need to be.
To ensure that a smooth application process takes place, and to give you a realistic idea of your borrowing capacity before you get your heart set on something that is out of your reach, contact Bee Finance Savvy on 1300 140 554 or email@example.com
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