The Ask
We received an application from a newly registered broker. Their clients, a married couple, were looking for £69,000 secured loan to consolidate a few financial pressures into one straightforward solution
The bulk of the loan was needed to repay an outstanding income tax bill, with the remaining funds used to repay a family loan and carry out home improvements on their property.
Most lenders will not consider tax liabilities or repayment of family loans, which immediately placed this case outside the criteria of many competitors. The borrowers also had recent adverse credit – making the case tricker to place for the broker.
The Challenge
This case came with a few moving parts that needed careful consideration. The applicants were a married couple with mixed employment (one full-time, one part-time) as well as some recent adverse credit, including a CCJ settled within the last year and several credit accounts that had fallen behind.
Although the CCJ was now cleared, it had been repaid using money borrowed from family. They also needed to clear a sizeable tax bill linked to a previous period of self-employment.
The challenge for us was to understand whether these issues were historic and resolved, or signs of ongoing risk and whether consolidating everything into one new facility would genuinely put the borrowers in a better position financially.
The Fix
The broker had provided an AVM upfront, so the case arrived well packaged and could be underwritten straightaway. To help the clients achieve what they needed, we approached the case accordingly:
- The unsecured arrears were more than six months old, making the CCJ the only active demerit. That meant we could confidently proceed on a Prestige 1 product
- The tax bill was linked to historic self-employment rather than their current PAYE income, so we were satisfied it wasn’t an ongoing risk
- For certainty and clean fund flow, we repaid the tax bill directly to HMRC and the family loan directly to the family member, following full KYC checks, Within three working days of initial enquiry, we provided a £69,000 secured loan at 59% LTV
The Benefit
By taking a pragmatic view on the historic credit issues and understanding the context behind them, we were able to help the clients reset their position and remove financial pressures.
With completion taking place in just three working days, the borrowers were able to move ahead quickly and with peace of mind, knowing the outstanding debts were settled and their home improvement plans could progress without delay.
If you’re working with clients facing historic credit issues, non-standard loan purposes or urgent deadlines, send us an enquiry- we’re always happy to take a look.
