Finding a consolidation loan...?!

leighmo_2

Hi, this is my first post (and hopefully a step towards managing my unsecured debts!) - so apologies if I am about to go on and on a little....

I really need some advice on obtaining a debt-consolidation loan.

I am about £18k in debt, through loans, an overdraft and credit cards. I am working full-time and am able to meet the monthly payments each month (I have no missed or late payments). But I am left with no money to live on whatsoever and this month have my MOT and service to pay for and have no idea where this money is going to come from.

I have spoken to a debt advice charity and they have told me to take up a Debt Management Plan. But with no missed/late payments, I feel this is extreme and am hopeful that there might be a better solution, that isn't going to have such dire effects on my life!

I visited my local branch of HSBC, who I have banked with for 12 years to discuss a consolidation loan. I spent an hour going through my finances with the adviser, who agreed that I looked like a great candidate for the loan, that he could easily see I would be able to make the payments of £200 (especially considering that I am currently meeting the £600 monthly payments I am currently faced with). He then warned me that "if the computer says no, there is nothing that him, nor anyone else could do to change the decision". So after a credit check....the computer said no

He then advised me to call his colleagues about a Managed Loan, which I certainly do not want (nor am eligible for as they would only take on their own credit, not external ones).

It is incredibly frustrating as any professional human being would be able to look over my finances, take everything into consideration and come to the decision that I can, and have been, meeting every monthly payment. I joined the Credit Expert website to check my credit score, which came out a 798 - classed as Fair (stating "most lenders would expect only a small proportion of people in this category to experience serious problems with repaying credit").

I am looking for a solution that will allow me to consolidate the debts and pay it off over a period of 7-10 years perhaps, to enable the monthly payments to be manageable again. Then, as and when I am able to, I will be able to rearrange the loan to increase the payments as my salary increases etc.

I really do not mind paying higher interest at the moment (it probably couldn't get any worse than some of the APR I am currently paying on cards etc). My priority for the time being is reducing the monthly payments. I will then attempt to rearrange the loan in a year or two, once my credit rating has improved and get a better interest rate.

Does anyone know any viable options for me now? I need an organisation that is able to actually base their decision on my personal circumstances, rather than one that is purely reliant on some formula in a computer system...!

I understand that I have got myself into this situation and am really trying to take responsibility of it so that I can actually live again! I haven't taken out a new debt for a long time and have no intention of trying to get any of this debt written off or cancelled; I am fully prepared to pay off every penny I have borrowed (and happily spent).

Any help or advice would be very much appreciated!

milliemonster

I should imagine if your own bank has turned you down then you will not get a competitive loan for that amount from anywhere else.

If your intention is also to start upping your repayments as and when your salary improves aswell, then a loan is not the answer as this would mean you would have to get a new loan each time you wanted to increase your payments, usually the payments are set at the beginning of the loan and cannot be altered unless you want to settle the whole amount. This means that you would over the term end up paying just as much in interest if you are going to change the loan every year you get a pay rise.

Instead, if you can currently meet your repayments, then you need to look again at your current budget, where things could be cut back to either improve your lifestyle a little, or increase your repayments to get the debt paid down quicker.

Post over on the DFW board, fill in an SOA (statement of affairs) and shee what advice you get

leighmo_2

Thank you both very much for your responses, I appreciate your time a lot.

milliemonster, I have reviewed and cut back on my spending. I literally am left with nothing once I've paid my monthly minimum payments, petrol to get to work and food. There is no extra money for frivolous expenditure! I am on a very tight budget right now.

I am quite happy to pay a higher, non-competitive interest rate for the time being. My priority right now is having some extra disposable income to afford to have some kind of life again!

I am willing to get a more competitive loan in the future with better rates, or if I'm fortunate enough to have an increased salary and can afford more each month. But for now, I just need to take control of the monthly payments. Whilst I'm making every minimum payment on time now and thus have a good payment history, sooner or later some unexpected expense will come up and this will be ruined.

Dreamlinefunding, thanks very much for your tips & advice. I will certainly keep these in mind as I try to search for a solution!

Wednesday

Have you looked at credit unions? That's what I'm about to try. You get the opportunity to explain what you will do with the loan and as far as I know it is looked at by a person - not a computer.

Good luck whatever you decide!

leighmo_2

I hadn't thought about it until I saw a similar suggestion in another post earlier. Thanks, I will do a bit of research into it tonight. Please let me know how you get on!! (and good luck)