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How do banks view your income when you are applying for a loan?

Image of incomeThe answer to the question of whether we can withdraw a loan and what is the maximum amount is related to the analysis of the borrowers’ income. Often, our customers are surprised that even with mortgage loans, creditors look at their earnings to approve the loan. The purpose of this material is to show that the maximum credit for you can be different for different banks.

Credit approval

In addition to banks’ credit approval analysis, anyone who is going to take a loan decides what part of the monthly earnings to pay for the monthly installment in order to be able to repay the loan without difficulty. Consultation of experts often begins with the solution of a customer assignment and it is subject to the following condition:

“I can pay 700 pounds, how much loan does that mean?”

But the answer is different for each bank, the differences can be so significant to predetermine the choice of a bank from which to withdraw the loan.

It depends of the income

Since we can not look at each bank’s credit policy, we will provide a guide.

The most common practice is that the amount of credit is determined by the maximum contribution according to the income of each.

And how it reaches its size – in most banks, it is a share of income, within 50-60%. For example, if the income is 1000 pounds, the monthly installment cannot be more than 500-600 pounds. This is the most basic calculation, along with it may be a requirement for a minimum monthly income per family member.


Where are the variations in bank loan size, as discussed above. On the one hand, it comes from the different methodsImage of cents of determining a maximum contribution, respectively, of the coefficients, the scoring, and so on. They may also come from the amount of income that banks recognize as a basis for calculation, especially when it comes to income from the liberal professions, company owners, rental income, etc. in order to reach the net monthly income that will recognize you as the basis for calculating your creditworthiness and therefore the amount of the loan. Many specific cases are often encountered in proving income.

Net income – income from which contributions, taxes, loan installments and other fixed costs, if any, have been deducted. If you calculate your net income, do not forget credit cards and overdrafts. For them, an average of about 5% of the allowed limit is taken on a repayment installment rather than the amount used.

Tip: If you are looking for a maximum loan amount and you are not sure that the income will be sufficient to the bank, seek help from a credit consultant. He will make accurate calculations if you can withdraw the desired loan.


A key milestone for credit approval is your credit history, which can be tracked for the past 10 years. If you allowed for arrears during this period, this could become a barrier to applying for a loan, especially this has happened over several consecutive periods. By making a credit, make sure you have repaid your monthly installments. And beware of Bad Credit Loans.



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