help on 25k loan, 22.94% interest!! Really appreciate help & advice

Laumandu

Hi, This is m first post on the site, so hello everyone.

I hope someone may be able to give me some advice. My husband and I have been on a financial rollercoaster for the past two years during his divorce (two year agreement with X,meaning he had to pay for her house too) and we also got married and I ended up on long term sick, hence we have now got a huge amount of debt. Around 40k between us. We took a join loan with our bank in September of 25k and have been paying 587.00 a month (staggering 22.94% apr). At the time this seemed an option to allow us the 3 month payment holiday to try an get straight, but due to the car breaking down and various other things we didn't manage to save any of that money. We soon realised combining out debts and taking this 25k loan was a very bad idea, but at the time we really needed a few months breathing space (payment holiday that comes with the loan).

I have asked for the settlement figure on the loan which is 26,000 (over the maximum unsecured borrowing). We both have excellent credit scored (checked experian) and have a joint income of £58k. Two months ago we had to buy the ex-marital home because after the two year agreement we were meant to be bought out by the X, but this didn't happen, and left us with the only option of buying it ourselves due to the fact it would have taken ages to sell (and we couldn't afford to keep going). We had to take a 90% mortgage - so currently have 20k equity.

We have decided to split the debt and take two seperate loans rather than have 25k joint one, as the interest rate is so high and we could get better rates with smaller seperate loans. We saw the bank last week and they could offer a slightly better rate 19% for my husband and 15% for me. The application however got rejected - I pressume because we currently owe 26k (due to interest) with the bank. We are on the electoral roll, have good scores and are homeowners, and all we want to do is to reduce our payments and get a better rate 587 is crazy! The bank suggested we wait a few months until it goes below 25k- but this could take over 6 months. 22.94% interest means we are hardly paying offf much.

We have a good income and good credit scores but cant seem to get help. Now we have been rejected that will be onl our file. Any idea what, if anything we can do? Would seeing a financial adviser help?

Id really appreciate any ideas xx

denibabe

hi,what bank was this? can't understand this as you say you both have good jobs and earn good salarys and have a good credit report this will not be the case as you say your debts are around £40k , the interest rate you say your paying is usually for people with bad credit history or are considered high risk surely you knew this interest was high when you signed the paperwork unfortunatly the more you apply for credit your file will be effected,i wish you luck and yes a financial advisor will explain your best options.

Laumandu

Its with Halifax (they have been my bank for ten years). I understand what you are saying but I think the reason the rate was so high was because we were borrowing the maximum you can borrow - 25k. I am signed up to credit expert with experian - and my current score is 999 - which is classed as excellent. My husbands is also classed as good. At the time we took the loan because of the 3 month payment holiday and we thought combining our debts would be a good idea as we had just got married. In hindsight it was a very stupid mistake. Ive had loans in the past ranging from 6.1 % with Alliance & Leicester up to 11% with Halifax - so I really have no idea why the APR was so high. Even now when they were doing the quote for us - the rates weren't great - due to he current recession the guy said.

At the time we took the loan - we thought we would be able to repay it in 6 months when the divorce settlement ended and his X bought us out - we were estimated to get around 50k. His x decided she couldn't buy it (5 bedroom house) and said we would either have to buy it or itd go on the market - financially we were finding it hard and so got a mortgage to buy it. The house ended up being valued at 210 - rather than 245 - so even if she had bought us out, we wouldn't have got as much as hoped. Taking on such am big mortgage was our only option as we couldn't wait for a sale and we decided to buy it and at least we would own it and hopefully the value would go up in a few years.

As the loan was only intended to be until the money came through - the APR wasn't as muc of an issue to us. However now we have bought the house.

Im honestly not sure why the APR was so high-perhaps because my husband was tied into a mortgage with his X and because we were only renting and had substantial debt. Ive no idea - as I said our reports are fine. We did have alot of outgoings as two houses - one with x and one we were renting for ourselves. We are now homeowners - but only bought it two months ago and have registered with electrol roll but this is not on my credit file yet. Usually thats not normally and issue though as Halifax is my bank. They advised waiting a couple of months and trying again as it was refused. I had been told at xmas when enquiring that we wouldn't be able to try for a cheaper rate yet because the settlement figure was higher than the maximum you can borrow unsecured. (interest made it 26k) We have only made 5 payments on the loan so far also.

The quotes we see online could potentially reduce our payments by up to £200 saving us a fortune, but we cant seem to get help. So far we have only tried with Halifax - but as they are my bank and we have mortgage with BOS - that seemed to be the best chance.

In total we owe 26k on the loan
10k Halifax Credit Card
7k Capital One Credit Card
Store cards 1000
O/D 1500
= APPROX 45K - Sorry was slightly higher than stated.

90% mortgage taken in December 20k equity
Electoral roll - updated a few weeks ago - not yet on credit file.

Salery - me 18,000
Husband 40,000


If anyone has any ideas on what we can do X

Ilian2008

I was in a similar position. I moved my account to Natwest and they offered me 25k at 10%