Refused, but why?

Stefanie.Bounds

Hello
I live in a rented flat with my fiance and we are looking to get a loan in his name.
I have bad credit rating and he has really good credit rating because hes bank (Nationwide) said they will offer him the lowest APR because of his good credit scoring.
He applied for a £10,000 loan saturday and got refejected. The bank didnt understand why so appealed against it and started a debate with the credit checkers experian, they have finally got back to him yesterday to say that the reason for the rejection is that his outgoing are too high and he wouldnt have enough to pay the £300 loan repayment to them a month,
but thats the whole point, he would because his other debts he pays a month will be gone!! So why offer a debt consulidation loan if your not going to give it! I would help him but there is not point going for a joint application because it will get rejected straight away.
We cant re apply with them now so we are going to try somewhere else tonight but ask for a lower amount over a longer period, do you think he would get this? We cant wait any longer we need to clear his credit card and my overdraft.
P.S he has checked his credit report on experian and its really good

nikki2804

It could be something to do with the fact that you are renting. For some reason this appears to go against you.

Also if the amount of credit already supplied to your fianc! is high they will deem him high risk

HTH

Stefanie.Bounds

yeah i though that, if we had a house and a mortage then its worth them lending it out as they know they can take it off you if you get into any trouble.

I dont think its cus he has alot of things in his name, he pays it all on time, i think its the amount we are asking for.

Just abit worried to apply lower somewhere else and then wreck his credit scoring.

sarahfenton

We have the same problem, have been refused a loan to pay off other loans, credit score is excellent but we can't get a loan as the existing loans are considered too high a risk.... Are they stupid?! Can't they see that we would be using the new loan to pay the existing loans off, so the risk would be less, not more?

Joeler

The risk to the lender is greater for a consolidation loan, as you are asking them to trust that you will pay off your other debts with the money. What is to stop you spending it, then owing potentially more than you can afford to repay, and eventually defaulting on the loan. This is what their risk assesments take into account.

It can be different if you approach the same lender as previous obligations, as they can physically shut down the old loan and repay it with the funds from the new one.

Secondly for an unsecured loan it doesnt matter if you rent or own a home as it is unsecured.

To OP, my advice would be for your OH to check he is on the electoral role and there is nothing wrong with his experian rating. Then apply with someone who only credit checks Experian, such as The Halifax. Also go for a lower amount if affordability may be an issue.

Good luck

sarahfenton

Is there any loan search facility that you can search for a loan, where you can get a pre-application decision? We don't want to get loads of refusals on our credit rating which is excellent... But don't want to ruin it by applying for loans and getting a list of refusals against our rating.

Have got a good to excellent rating, and don't want to damage it; just want to get some finance to pay off an existing 15k mbna balance as they are now charging 34.9%!!!

Joeler

Hi Sarah

Not that I'm aware of... What about speaking to your bank? They have the most information on you and can probably give you an idea of whether you will be eligible.

Other than this it is a bit of a lottery, but you can sway the odds in your favour by ensuring the basics like you are on the electoral role, there are no nasties on your credit report with the three agencies, and that you aren't using a massive percentage of your available credit with exisitng cards/loans etc.

Hope this helps and good luck!

Stefanie.Bounds

Thanks for your good advice

sulkisu

I have just noticed that the loan is to cover his debts and your overdraft. Depending on the size of your overdraft, this might also be part of the problem. Your overdraft will not show up on his credit report, so as far as the bank is concerned he is not only seeking a consolidation loan but also an additional amount. In other words he is consolidating his existing debts plus taking on a new debt. Without knowing the exact amount of his debts and your overdraft, it is difficult to say, but (a bank manager friend explained this to me) consolidation loans are more likely to succeed, if the amount requested is the maximum needed to clear all outstanding debts. So if you have £5k of existing debts, an application for a £10k consolidation loan will probably be refused as all you are doing is paying off £5k of debts and incurring £5k debts (admittedly your repayments may be lower).

ILW

OP
Are you certain there are no financial links between you and your fiance.

Stefanie.Bounds

Hello,

Thats probably why then. It disupted for about 2 days then it got refused.

We have applied for Tesco now for £7k.

They have approved in principle but that means jack. He has signed the paper work and send bank statement but still have to wait until next week until they decide!