Quote Originally Posted by lastlid View Post
Ah. OK Thanks.

Is that because the loan is considered to be a manageable sum of debt, compared to an overdraft? (Sorry if I have used the wrong jargon.) I guess an overdraft is potentially indicative of spending more than one has.....is that the reasoning? Whereas a loan repayment would be considered to be within ones means?
The ECO is really wanting to know just how much of your income could be classed as discretionary spending (your personal choice) and how much is non-dicretionary.
Mortgage or rental is normally considered non-discretionary, basically because non-payment could result in loss of accomodation.
Credit-cards and normal bank loans are in a way considered to be discretionary. Payment default does not usually result in loss of accomodation and is generally only a civil issue.
You are correct about overdraft. Plenty of people have one, but being in varying levels of OD can be indicative of living beyond ones means.
This is just a very basic explanation. As with most things there are usually many facets.