Need a consolidation loan... but struggling :(

EZTutty

Hey,

I brought a house approx 9months ago, i already had some credit card debts and a car loan (at 13.9% :mad:) before this, and since have run up a bit more on the credit cards getting furniture, decorating etc.

I'm looking for a loan to consolidate my 2 credit cards and my loan, over 4years, this would make me much better off, and save me money in the long run (considerably reduced interest costs).

However i'm struggling to find a company that will take me on at a decent rate (preferably 10% or less APR). No one seems interested in take me on.

I'm looking to borrow 18k over 4 years, i'm 22, i have a clean credit history (no missed payments etc ever), and i've had a couple of loans in the past which have been paid in full. I'm on good money approx £36k a year.

Why won't anyone lend to me?

I have also tried getting 0% interest balance transfer cards to save me some money, but am also being rejected.

It's been approx 3months since my last application (i didn't want to keep banging applications in, as i'm aware this can affect the decision of other companys.)

Any help and advise would be appreciated.

Thanks

Paul

Cash_Flow

Firstly have you tried your own Bank?

I think you are going to find it near impossible to borrow £18.000 in the current climate.

Whilst I do understand you earn good money don't forget you are asking to borrow 50% of your annual salary

In the eyes of any perspective lenders you may be deemed too much of a risk I’m afraid.

Rafter

Paul,

There is either something wrong with your credit rating or you are simply failing the scorecard of the banks you are applying to.

This is probably due to the following factors:

1. You are young

2. £18k on top of your current debt is a lot more than 50% of your salary.

3. You have run up debts quite quickly

4. There is a recession on

5. You are still adjusting to home ownership and have lived at your current address less than 12 months.


I don't think you need a consolidation loan, you want one.

What you need to do is get your finances and budget in order so you can easily make your debt repayments and also start making a hole in those loans that are the most expensive - credit card debt and your car loan.

Sorry to sound harsh, but consolidation loans and spreading your loans over a longer period are often not the solution. You just need to go on a money diet and get yourself back in control - otherwise you could find yourself in a lot of trouble if you did lose your job or had a big unexpected bill to deal with.

Good luck

R.

EZTutty

Thanks for the comments..

'Cash Flow' i have tried my own bank, and they turned me down, but i'm with Halifax, and compared to HSBC who i used to use, i think there pretty poor, may consider going back to HSBC, they always seemed more willing to help.

'Rafter' the £18k isn't going to be on top of my current debts, £18k is the total i'd need to borrow to cover all my debts

My finances are about the best they can be at the moment, but i'm still having to rely on credit cards etc at the end of the month, and to manage i pretty much have no social life nor do i waste money on pointless things, and luxuries.

a 4 year loan i'm sure is a lot less than the time it will take me to pay back my debts as they stand, and i'm positive it would also be cheaper, if i did manage to get a consolidation loan, i'd also distroy and close my credit card accounts, and wouldn't even look at another card.

I'm not trying to justify my spending (because i don't need to), and i'm not looking at a consolidation loan as a quick fix, but a sensable alternative.

CLAPTON

Most lenders will 'see' your total potential debt as 18+18 i.e. 36k
even if you intend to use the loan to clear the other debts there is no requirement for you to do so.

You may be better off you try for a smaller loan say 7-8k, then use it to pay off the highest APR debts you have, wait a bit then apply for another similar loan.

Rafter

Totally understand where you are coming from - but the bank won't see it like that. They will se a risk that you get the loan and still borrow on cards and in 2 years time you will owe £25k and not £18k and get into difficulty.

By your own admission, you are having to use cards each month. This suggests you either have borrowed too much already or are spending too much.

You don't have to justify your spending but you may have to go easy, even for a short period so that you stop the cycle of borrowing more each month just to make ends meet.

You have joined the right site for advice and tips on how to do this though.

R.

Dinah93

On a salary of 36k there is no way it should be taking you 4 years to repay 18k. You're not getting anywhere applying for a consolidation loan (which might be a good wake up call to address your budget and stop robbing peter to pay paul), so I would say your next step is to go to the debt free wannabe forum on this site, post up your statement of affairs, and let all the amazing people on there help you out of your predicament.

EZTutty

'Rafter' i never thought of it like that, thanks for the input :beer:

'Dinah93' well monthly my income is approx £2200

£900 of this goes on mortgage, council tax, water, gas and electric.

Then my car loan is £280 per month (7k over 32months... poor APR )

Internet, home phone + mobile come to approx £65 a month.

on average i spend about a month £200 on fuel.

£120 a month on food

and i usuall put out about £500-550 between the 2 credit cards

Which leaves £135 for going out, any repairs for house or car, and i'm currently saving for Home insurance (due in august) and car insurance due in October (expected to be nearly £900 :mad:)

My money is pretty well eaten up. and it seems a good percentage of the £500 a month i'm chucking at credit cards is being wasted on crazy interest.