Help Refused Loan

joevans

Hi All

First post!!! Bit of a problem I have 2 loans and 1 credit card. The loans are £10,000 with Tesco and £8000 with Natwest and a credit card with a o/s balance of around £1000. On the two loans togther im currently paying just over £400 each month. I also have £4500 in my bank account which I would like to go towards paying this debt off. So I thought i would be able to consolidate the loans and take the £4500 off. However i have tried Natwest and co op online and been refused. I was hoping it would go through which would of saved me around £100 on loan repayments each month and have my credit card cleared. My credit score is excellant the reason is to do with the amount of credit i've got. Which is strange because I would actually be reducing my credit by 4.5k any advice. Thanks.

Beast

In the eyes of the lender you're actually increasing your credit, not reducing it as they cannot force you to pay off your existing loans with the money they lend you.

Tixy

Likely because they of the overall amount of credit you would have after taking out the new loan and before repaying the old loan.

If Natwest give you an extra £6k they have no guarantee you will use this and the £4k savings to repay your tesco debt.
If Co-op lend you a full £14k you could spend all this on top of your existing debts and not be able to afford to repay them all.

So to Natwest potential credit exposure is £10k + £8k + additional £6k + whatever the limit on your credit card is.

To a new provider the exposure is £10k + £8k + £14k new loan + credit card limit. So at least £33k, which is high.

Snippa

Is there no way you can pay the £4500 off the existing debt first, then go back and see if you can consolidate with the new, smaller amount?

joevans

Maybe think I might go in the branch and see what they recommend rather than online. Thanks

JA1000

The loans are probably fixed, which means you have to continue to pay until the end, the only way out is to pay it off in full as a final settlement which can be requested at any time. If you do pay the £4.5 they will not reduce the amount but just use this for the monthly repayments.

Keep the money, keep paying the monthly amounts until you save enought to pay one off, get rid of the CC debt as this will be at a higher rate.