Last reviewed May 2026
QUICK ANSWER
Lenders are legally required to check you can afford a loan, usually via bank statements or Open Banking. What affects this most is whether your income is disclosed accurately, how it's trending, and patterns of spending on missed payments, gambling and Buy Now Pay Later (BNPL).
There are several ways affordability is considered by lenders. Usually this involves looking at bank statements or, for a quicker decision, opting in to Open Banking. Here's what to keep in mind so your affordability isn't impacted more than it needs to be.
Five things that affect your affordability
Your average income
Make sure the income you disclose is monthly, net (after tax), and realistic for your household.
Your regular income
Lenders can see if your income is trending up or down. If it's recently decreased, use your most recent income figures rather than an older average.
Missed payments
One or two missed payments may not be too much of an issue. However, several bounced direct debits over the last couple of months are likely to mean a decline.
Gambling
It's fine to have a flutter. But if a lender sees very high amounts spent on gambling, or spending that's more than weekly, they may decline the loan.
Buy Now Pay Later (BNPL)
Using BNPL, like Klarna, for a handful of small purchases is fine, as long as repayments aren't repeatedly missed. Using it for dozens of purchases, or to pay for essentials like food, makes a decline more likely.
Key takeaways
- Report income as monthly and net, not gross or annual
- Use your latest income figure if it's recently dropped
- A couple of missed payments rarely sinks an application; a pattern of bounced debits does
- Frequent or high-value gambling raises concern with lenders
- Buy now, pay later (BNPL) for small, occasional purchases is fine; using it for essentials and frequently is a red flag
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