Loan application - Nationwide won't take comms into account?
Discussion
Am in the process of looking at a loan (around £20k) to put toward a car in conjunction with a chunk of savings (probably £17k).
Running through the loan quote on the Nationwide site they ask for 'net monthly income'; I'm in a role (10 years now) where commission makes up a good portion of my earnings and my thought process was to average the last 12 months' net income and use that as the monthly figure. Wasn't 100% sure if that was the right way to proceed so put in a call to their help line to ask.
Apparently they will not take any commission income into account (despite seeing the monthly figures regularly going into my current account with them). I haven't yet been able to re-run a quote based on my basic income as annoyingly their quote tool won't let me restart the process. It may still be enough to make it work.
I don't want to apply for a loan 'incorrectly' but it seems a bit mad that consistent, decent commission can't be counted as 'income'. It's been probably 15 years since I took out a loan - is this approach of 'no commission' going to be typical of all lenders? Would I need to look at specialist companies for it? FWIW, I have a perfect credit score at the moment which is helpful.
Running through the loan quote on the Nationwide site they ask for 'net monthly income'; I'm in a role (10 years now) where commission makes up a good portion of my earnings and my thought process was to average the last 12 months' net income and use that as the monthly figure. Wasn't 100% sure if that was the right way to proceed so put in a call to their help line to ask.
Apparently they will not take any commission income into account (despite seeing the monthly figures regularly going into my current account with them). I haven't yet been able to re-run a quote based on my basic income as annoyingly their quote tool won't let me restart the process. It may still be enough to make it work.
I don't want to apply for a loan 'incorrectly' but it seems a bit mad that consistent, decent commission can't be counted as 'income'. It's been probably 15 years since I took out a loan - is this approach of 'no commission' going to be typical of all lenders? Would I need to look at specialist companies for it? FWIW, I have a perfect credit score at the moment which is helpful.
im not sayin g lie on anything but my pay at a company used to be the basic salary and a store bonus as a percentage of sales. being food retail it was a known minimum every month and would only vary between £300-£330 regardless of sales.
but on the pay into the bank it just shows as one figure.
So use that figure and ignore bonus.
unlike during covid my current company gave us a 1 off bonus 10% extra in 2 months. that is an actual bonus figure that shouldnt be counted in salary.
but on the pay into the bank it just shows as one figure.
So use that figure and ignore bonus.
unlike during covid my current company gave us a 1 off bonus 10% extra in 2 months. that is an actual bonus figure that shouldnt be counted in salary.
Well technically it'd be fraud to count it I guess, knowing their rule.
Ironically my plan was to clear the loan completely around Easter anyway but my current car goes in Dec so I'll need something by then. I might just buy something cheap to trundle around in over winter, save and then buy outright early next year (unless I can find a lender willing to take comms into account at a sensible interest rate).
I appreciate NW have their rules but it seems daft that when I can show consistent, decent comms income - into a current account held with them, no less! - they won't even consider it.
Ironically my plan was to clear the loan completely around Easter anyway but my current car goes in Dec so I'll need something by then. I might just buy something cheap to trundle around in over winter, save and then buy outright early next year (unless I can find a lender willing to take comms into account at a sensible interest rate).
I appreciate NW have their rules but it seems daft that when I can show consistent, decent comms income - into a current account held with them, no less! - they won't even consider it.
Simpo Two said:
Maybe try another provider?
Well that was my first thought too but it seems to be hard to find information about which lenders will allow it and I don't want to go around applying all over the place...All comms show on my payslips but Jul/Aug are always quieter months with customers and suppliers away on holidays so the last quarter isn't a good one to use - although the figures aren't bad, just a little lower than average. For context my Oct pay will be 2x what I earned last month.
I had the same issue with mortgages; as a result my broker recommended Natwest as they will take a 12-month rolling average which is actually a far better indicator of finances than looking at the last 3 months. I need to find the same for an unsecured loan ideally.
Or as mentioned I might just buy a cheap winter runaround and buy the new car outright in a few months' time without the loan faff.
The last time I applied for a mortgage with Nationwide I was working in sales & paid a basic monthly salary plus commission & bonus (for meeting targets) every 3 months. I took my last 12 months earnings, divided by 12 & submitted that as my monthly earnings. I could show very similar earnings for 4 consecutive years. It was accepted. That was quite a few years ago though.
Very similar.
Nationwide. Took 20K loan plus my own lump to buy a car.
Applied. Showed £X as my income. Left it at that.
I did have cause to speak to them and the chap did say we can see XXXX going into your account every month so should be no issues.
They'll not see the details of your base/bonus but as long as your overall income figure is accurate it shouldn't be a problem.
Top tip, as with many other loans, stretch out the repayment time. It reduces the amount you 'need' monthly and in reality if you want to overpay it's very simple to do so.
I set mine to £350pm and every time I look at the Exige 350 on the drive I know it's absolutely worth it
Nationwide. Took 20K loan plus my own lump to buy a car.
Applied. Showed £X as my income. Left it at that.
I did have cause to speak to them and the chap did say we can see XXXX going into your account every month so should be no issues.
They'll not see the details of your base/bonus but as long as your overall income figure is accurate it shouldn't be a problem.
Top tip, as with many other loans, stretch out the repayment time. It reduces the amount you 'need' monthly and in reality if you want to overpay it's very simple to do so.
I set mine to £350pm and every time I look at the Exige 350 on the drive I know it's absolutely worth it
The thing that makes finding out information tricky is that if you Google for something like 'unsecured loan basic +commission' or similar, it throws back loads of results because the cut a broker gets is, of course, often referenced as a 'commission' too.
This situaion is one of the downsides of everything becoming 'apply online' and automated decisions based on strict parameters with no option to talk to someone who can take a sensible, pragmatic view. Mine's not even really that much of an unusual position really - it must be a nightmare for those with more complex income streams etc.
This situaion is one of the downsides of everything becoming 'apply online' and automated decisions based on strict parameters with no option to talk to someone who can take a sensible, pragmatic view. Mine's not even really that much of an unusual position really - it must be a nightmare for those with more complex income streams etc.
Not sure if this “circumvents” you giving them the info, but do you bank with an App? I know with mine once I log in there is the option to apply for a loan & they give you a quote of what you are likely to be given with an immediate decision based on their existing knowledge of you incomes/outgoings?
(I’m guessing if you are intending clearing it in a few months “shopping around” is largely irrelevant although I believe you are more likely to get approved for a term of 3years than 1 as the thing that works affordability assess monthly outgoings, interest is potentially lower too )
Just tried mine with purpose of car loan (they immediately suggested what they though I was good for, but tailoring down to the parameters required & I’m “highly likely” for £20k over 3 years @ 3.4%
(I’m guessing if you are intending clearing it in a few months “shopping around” is largely irrelevant although I believe you are more likely to get approved for a term of 3years than 1 as the thing that works affordability assess monthly outgoings, interest is potentially lower too )
Just tried mine with purpose of car loan (they immediately suggested what they though I was good for, but tailoring down to the parameters required & I’m “highly likely” for £20k over 3 years @ 3.4%
I went into Clearscore last night and it seems there's potential for ambiguity... Ratesetter come up high for me as pre-approved based on £20k over 48 (although as mentioned I don't intend to have it for more than 4-6 months anyway so the term doesn't really matter). I have my total income recorded in Clearscore which I based on my last P60 - my income pro-rata is actually higher YoY so far, so it's about £15k lower than my actual 12-month rolling income. Clicking the 'Apply Now' through to Ratesetter's site it seems they simply pull the info from Clearscore as there wasn't anywhere to amend my income etc, only to vary the amount/length of the loan. Of course it's possible that they might ask to see proof of income (at which point I could supply said P60 which would mirror what I've recorded on Clearscore) but if they want the last 3 months payslips then that wouldn't accurately reflect my overall average income.
I think I'm just going to buy a cheapy shed to run over winter and revisit things in Feb/Mar - I also think that with the economic climate still on a downward trajectory we might see a drop in used car prices over the next 6 months or so.
I think I'm just going to buy a cheapy shed to run over winter and revisit things in Feb/Mar - I also think that with the economic climate still on a downward trajectory we might see a drop in used car prices over the next 6 months or so.
Funk said:
I went into Clearscore last night and it seems there's potential for ambiguity... Ratesetter come up high for me as pre-approved based on £20k over 48 (although as mentioned I don't intend to have it for more than 4-6 months anyway so the term doesn't really matter). I have my total income recorded in Clearscore which I based on my last P60 - my income pro-rata is actually higher YoY so far, so it's about £15k lower than my actual 12-month rolling income. Clicking the 'Apply Now' through to Ratesetter's site it seems they simply pull the info from Clearscore as there wasn't anywhere to amend my income etc, only to vary the amount/length of the loan. Of course it's possible that they might ask to see proof of income (at which point I could supply said P60 which would mirror what I've recorded on Clearscore) but if they want the last 3 months payslips then that wouldn't accurately reflect my overall average income.
I think I'm just going to buy a cheapy shed to run over winter and revisit things in Feb/Mar - I also think that with the economic climate still on a downward trajectory we might see a drop in used car prices over the next 6 months or so.
"but if they want the last 3 months payslips then that wouldn't accurately reflect my overall average income"I think I'm just going to buy a cheapy shed to run over winter and revisit things in Feb/Mar - I also think that with the economic climate still on a downward trajectory we might see a drop in used car prices over the next 6 months or so.
I broker mortgages not personal loans, but for mortgages, for someone paid monthly commission then their lending capacity would usually be assessed on the average of their last three months commission income, not what is on the P60. So if you are telling them that you earn XYZ from your P60, then as your bank they would be seeing receipt of income being less than that, that could be your issue.......
With respect to the lenders, that's a poor way of doing things as my sales years have an ebb and flow which is consistent - Dec/Jan, Apr and July/Aug are always slower months due to nothing more sinister than holiday periods. Conversely if I were to take my 'best quarters' it would massively overstate what I should realistically be able to borrow. The longer-term average is way more realistic - and YoY I'm up so I can demonstrate consistency.
Anyway, it's kinda moot; it looks like I could blag it if I wanted to but I'm just going to enjoy some shedding again for a bit. Be nice not to worry about door dings and wheel scuffs for a while, that's for sure.
Anyway, it's kinda moot; it looks like I could blag it if I wanted to but I'm just going to enjoy some shedding again for a bit. Be nice not to worry about door dings and wheel scuffs for a while, that's for sure.
Funk said:
With respect to the lenders, that's a poor way of doing things as my sales years have an ebb and flow which is consistent - Dec/Jan, Apr and July/Aug are always slower months due to nothing more sinister than holiday periods. Conversely if I were to take my 'best quarters' it would massively overstate what I should realistically be able to borrow. The longer-term average is way more realistic - and YoY I'm up so I can demonstrate consistency.
Anyway, it's kinda moot; it looks like I could blag it if I wanted to but I'm just going to enjoy some shedding again for a bit. Be nice not to worry about door dings and wheel scuffs for a while, that's for sure.
It's not an exact science and yes, clients with a strong recent commission earnings could borrow more at that time, which is something we can utilise in some cases and would apply to you if you applied at the right time of the year....Anyway, it's kinda moot; it looks like I could blag it if I wanted to but I'm just going to enjoy some shedding again for a bit. Be nice not to worry about door dings and wheel scuffs for a while, that's for sure.
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