You can still get a loan if you have recently started a new job, but it may be more of a challenge to get accepted for the one you want.
As a rule, lenders see people who have spent just a short amount of time with their current employer as a greater risk. This may be because:
Simply put, if you’re new to your position, lenders may worry you lack job security.
Lenders care about your job security because it is likely to affect whether or not you’re able to meet your loan repayments.
If, for example, you have set monthly loan repayments of £300 and you lose your job with little notice, this unexpected loss of income could mean you’ll struggle to meet your repayments.
Not paying will not only affect your credit history, but it will also result in more work for the lender if they have to chase you for payments.
Before lenders accept loan applications, they want to be confident that the borrower will maintain their repayments. Anything that could obstruct that – such as a job loss - might deter them.
There is no set answer for this. It might be worth waiting until you’ve been at your current job for at least three to six months before applying for a loan, though.
Remember, loan applications can appear on your credit history, so it’s not a good idea to apply for several loans in a short space of time if you know beforehand there’s a slim chance of being accepted. Applying for lots of credit at once may be off-putting for lenders as it can make you appear desperate to access cash.
Although a new job will factor into the decision-making process of your loan application, there are a few other things that could strengthen your application and balance it out.
For example, a good credit history, plenty of equity in your home (if you’re applying for a secured loan) and your partner’s salary, if you’re applying for a joint loan, could improve your chances of being accepted.
As we mentioned, if you’ve just started a new job, it might be worth holding off applying for a loan for a few months until your job security is a little more assured. You could even ask your employer to provide you with confirmation in writing when you pass your probation.
And if you know that you’ll be leaving your current job soon and you don’t have another lined up, now may not be the best time to apply for a loan. You may struggle to afford your repayments once your income drops, and missing them could damage your credit history. If it’s a secured loan you’re considering, your home will also be at risk if you stop paying.
Disclaimer: We make every effort to ensure that content is correct at the time of publication. Please note that information published on this website does not constitute financial advice, and we aren’t responsible for the content of any external sites.
Helen is a personal finance editor who’s spent 11 years (and counting!) in the finance industry. She creates content on everything money with the goal of getting people thinking – and talking – about their finances in ways they may not have done before.
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