Declined a debt consolidation loan from my bank - do not know what to do!

GMC9IAR

I've just been declined a loan from my bank for £15k which I was going to use to Consolidate my credit card/pay off my car

Due to a change in circumstance I am now paying a full mortgage whereby I was receiving half previously (although my flat is in my name).

In order to cut costs I decided to consolidate my credit card debt and get rid of my car which is on finance. As I require a car for work I requested and extra £2k on top of my debts to get a car and pay the insurance for a year. The breakdown of that I requested was

Credit Cards - £10.5k
Outstanding Finance/negative equity (once car sold privately) - £2.5k (£13k outstanding -sale price £10.5k)
New car insurance - £2k

I am a home owner and took out a secured loan against the property to furnish at the time of purchase for approx £12k
I am never over-drawn/miss payments
My annual income is £28,500

I was declined due to "negative trends" on my account.

I really do not where to go from here as my cards are maxed out and the monthly car payments crippling me.

Any advice?

TMoose

Your best bet is to head over to the Debt Free Wannabe board and post up a Statement of Affairs : http://www.makesenseofcards.com/soacalc.html and the very kind and gentle people there will give you good advice as to how to cut your expenses/maximise your income and how best to tackle your debts.

A consolidation loan is very rarely the best way forward.

CLAPTON

Why not try to borrow a much smaller amount i.e. 4-5K, sell the car (using 2.5k) and use the rest for cheap car and insurance (although insurance can be paid monthly )

presumably then your car monthly payments can be thrown at the CC debts

Ames

How on earth is your insurance so high? If you're a homeowner presumably you're not a teenage boy racer! I agree with going over to the debt free wannabe board. I (and many others over there) consolidated and ended up in a far worse situation. You'll probably look back at this and be grateful that your bank turned you down.

Malky

Ames wrote: »

How on earth is your insurance so high?.

I think the OP is needing 2K for a car AND insurance

GMC9IAR

Yes Malky that's right.

The main issue with my debt is my credit cards. Both are pretty much maxed out so I am not making any dent whatsoever into the balances each month.

donkeyman

You could sell some of the £10,000 worth of stuff you bought with credit cards.

michael1983l

I think Negative trends in your case means that you are above 75% of your available credit. Meaning on your overdraft and creditcards you are using over 75% of your balance. this is a major turnoff for lenders and in this market most likely to lead to rejections.

mdawson29

Hi GMC,

Similar situation to us then ......

Our credit cards and loans added up to £22000. We weren't in arears with mortgage, utilities or car HP. We were paying out almost £800pm towards our cards and loans. I got made redundant at the begining of the year and my partner had to take a salary cut. We were in trouble to say the least. We were contemplating a consolidation loan and were warned not to. And we were adviced to go bankrupt, which we also didn't want to do.

We decided to go with a debt management company and are ever so happy we did. We now only pay what we can afford, which is £225pm. So we aren't faultering on any of our 'priority' debts i.e. mortgage, car HP and utilities. The debt management company do take a percentage of what you pay them, but they do all the negotiating with your creditors. So you only pay 1 person and they distribute it pro-rata to what you owe your creditors. The debt management company also negotiate in freezing interest and any fees.

I haven't mentioned who we use as I don't know if it is called advertising. But if you type it into your search engine plenty will come up. We tried the DIY companies, where you write and plead with the creditors yourself, but they didn't seem to take us seriously and still kept on getting badgering us every other day. At least with this company, we haven't heard from our creditor in over 2 months.

All the best.
Regards

SingleSue

You don't need to pay a fee to a debt management company, there are charities that provide the same service for nothing so that every penny you pay, goes toward creditors.

Links are available on the DFW board to these charities...I know CCCS are one of them but I have got brain drain today and can't remember the others!