Loan Advice

The_Grateful_Ghoul

I am looking at borrowing £16,500 which will pay of exisiting car loan, credit cards and enable me to get a new car with a small engine with cheaper tax etc.

The loan repayments are around £340 on the current deals available which is the same that I am paying at the moment for an existing loan and I have the added bonuses of clearing credit cards and cutting them up once and for all.

Despite me already have loaned this ammount in the past and having ok credit history, my bank First Direct said they cannot lend this much again due to tightening of their rules etc even though I have never missed a payment or entered my overdraft at all.

I wanted to keep the loan in my name as my partner does not have a good credit history due to a previous relationship, as it looks like my only chance to loan this ammount would be by applying for a joint loan, how much would it harm our chances by applying for this ammount with my good credit and her not so good ?

Hope this makes sense, any advice would be appreciated.

Many Thanks in Advance.

Tixy

If she doesn't have a good credit history then it would seem there is little point in applying for a joint loan.

It sounds like you have been refused a loan because of the amount of exisiting debt you have (or available credit you have access to) compared to your salary.

Lenders are generally much stricter with their lending criteria now than in the past. They may be worried that you can afford this new loan (whilst you intend to consolidate, to them you may spend all this £16.5k on top of your existing debts and struggle to keep up with repayments).

Is there any other alternative? what are your current debts (balances & APRs?) what is the current car worth?

The_Grateful_Ghoul

Current debts are 5,000 for exisiting loan, 6,000 credit cards, 5,000 needed for car. Wage £25,000

Loan required 16,000 8.9% apr.

The irony is without the new loan my monthly outgoings would be more than with the loan. The new loan with will consolodate the debt and car would be the same price as current loan on it's own.

Ideally if I were to be accepted for the loan again, I would cut up the plastic once and for all to get debt free over the 5 year loan with a more efficent car.

Even though the loan is in my name only, my partner helps with the payments.

Tixy

Hi

Well I think you will struggle. Most mainstream lenders now seem to be happy to give you total credit up to no more than 50% of your income. Which would obviously be around £12.5k. But as you have the £11k already you may struggle to get any more unsecured credit at the moment.

It is frustrating when your debts would be cheaper with a loan but it looks like you may need to try to reduce your debts another way.

Its also worth mentioning that many many people on these forums have consolidated debts and got in to a lot more trouble running up their overdrafts or credit cards again (everyone thinks they won't be this stupid but it is so easy to gradually slip back) .

Can you work on trying to reduce the APRs on your exisiting credit cards? do you have space on any of the cards to move round the balances by BT to try to get good promotional deals (either 0% or low life of balance deals).

Does your new car have to cost £5k more than the current one if worth?
Could you buy a cheaper car instead?

Sorry I know this post isn't what you want to hear but the fact is it is much much harder to get credit now.

The_Grateful_Ghoul

Thanks for your advice, really appreciated.
It is frustrating to think it's the same price that I am paying already and never missed a payment in 4 years but understand their reasons at the same time.

Thanks for your Help :beer: