Turned down for a big loan - can you help?

The_Jobber

Hi there,

We basically have £20,000 worth of debt on credit cards. We also have 2 other loans that end this year. We've not missed any payments.

We applied for a £20,000 loan from Alliance & Leicester and we got rejected.

The loan is needed to pay off all the credit cards and this would reduce our monthly payments drastically.

As we were rejected, does anyone have any advice on getting a loan? Is my bank the best option? (it's going to cost a lot more than the A&L loan mind)

Or are we stuck here? The interest on the credit cards is huge and doesn't seem to be going down at all.

By the way, we both work full time and earn iro £32,000 gross combined.

I'm really worried

Rafter

Jobber,

Debt consolidation loans are really hard to come by. Over £20k is a lot of debt if you are only earning £32k gross.

If the interest rate on the cards has gone up recently you can ask to have the interest frozen and then repay the balance (you won't be able to use the cards though).

You also need to get your finances in order - paying off money over a longer period often isn't the answer.

You need to fill out a statement of affairs. Make any savings you can and then talk to a debt advice charity about your options. It sounds like if you can negotiate reduced payments until your other loans are paid off you can tide yourself over - but this may make getting credit much harder in the future.

Good luck

R.

http://www.makesenseofcards.com/soacalc.html

CLAPTON

basically you have debts of 20,000
you are trying to get a new loan of 20,000

bank see 40,000 of debt on a 32,000 income.. just not going to happen

you may be planning to clear off debt but there is no guarentee that you will.

you would be better to look at a piecemeal approach
a good BT deal here or a small (5k ish) loan there and pay off your highest APRs debts


and of course review your spending and try to free up more money to repay the debts.

GOLFER

Hi

When you say have your interest frozen and pay off the debt. Does that mean they freeze interest at current rate or do they allow you to pay off card without any interest.

Many thanks

Golfer

The_Jobber

Would you recommend using a company like CCCS then? (I just Googled Debt Advice Charity and they came up)

Would the prevent us getting credit in the future? Or a good remortgage rate?

CLAPTON

The_Jobber wrote: »

Would you recommend using a company like CCCS then? (I just Googled Debt Advice Charity and they came up)

Would the prevent us getting credit in the future? Or a good remortgage rate?

using CCS means you will default on your debts
I'm afraid that will trash your credit rating for 6 years from the date of default.

CLAPTON

GOLFER wrote: »

Hi

When you say have your interest frozen and pay off the debt. Does that mean they freeze interest at current rate or do they allow you to pay off card without any interest.

Many thanks

Golfer

it means that the interest rate is frozen and the card closed for any further use.

The_Jobber

I forgot to mention, the loans that end late this year (2 loans) totalled £27,000.

Once these are paid we will just owe the £20,000 on credit cards.

Would you recommend maybe paying the min payments to the c/cards until these loans expire then maybe applying for a loan then?

We have never missed a loan payment, and never miss paying a credit card payment either.

CLAPTON

The_Jobber wrote: »

I forgot to mention, the loans that end late this year (2 loans) totalled £27,000.

Once these are paid we will just owe the £20,000 on credit cards.

Would you recommend maybe paying the min payments to the c/cards until these loans expire then maybe applying for a loan then?

We have never missed a loan payment, and never miss paying a credit card payment either.

I would advice paying the minimum on all debts except the debt with the highest APR and paying as much as possible on that. this will reduce the debt the soonest with the least interest being paid

The_Jobber

CLAPTON wrote: »

it means that the interest rate is frozen and the card closed for any further use.

Does this affect your credit score, and the ability to obtain credit in the future?

CLAPTON

The_Jobber wrote: »

Does this affect your credit score, and the ability to obtain credit in the future?

no it doesn't affect your credit score

it only applies when they increase your APR.. you just ask them to maintina the existing APR and you continue to pay off as normal
you can't use the CC anymore and they will completely close the a/c when the balance falls to zero.