Confused??

Maximus972

Hi,
I have to admit that I am confused and advice would be helpful. I am in a unique position where the wife and myself are able to manage our debts and there is a few of them as we have been married before and both took on substantial debt from our respective Ex's. We did this as we are both in the Armed Forces and wanted to keep our pensions. We were advised at the time that we would have to take on the majority of the debts or they would be able to a large chunk of the pension (lumpsum and monthly payments as they did not have pensions themselves). We took that advice and the pensions are safe but we have a lot of debt. We both have loans from the bank and have credit cards. As I said we are able to meet these commitments but wanted to redo our bank loans to pay a lot of the cards off, this would have allowed us to pay more off the loans and other smaller bits. By doing so we could have slashed the time to repay drastically as we would have increased the amount we were able and prepared to pay back.

The problem is this - We have checked our credit history with Experian using the free 30 day trial and all of it was green and there were no issues with it whatsoever on both of us, there were no legacy issues or anybody else linked to us at all. We applied to the Nat West for a loan each to allow us to do what we said. We were initially turned down and the bank said that they would appeal as it was clear that we could afford to pay. The appeal was submitted and my wife was declined due to possible internal scoring so the bank said, they didnt sound that convinced themselves, they are still looking at mine as we speak. We have been with the bank for 20 years and our salries are paid in monthly to them and we already have existing loans with them which would be cleared and started again. We have never been in arrears or been late. We have no idea what the problem is, credit history is good, been with our employer for 20 years, take home £4300 a month and have no kids. We are in Military housing so that amount we get is after our rent has been taken out and council tax as this is done at source.

God knows what you have to do to try and clear your debts quickly. For those who think that because of our income we could pay that off fast, this is true but it is the cards that have high interest as opposed to a loan and that is what is taking the money. If it was a loan at a loan rate we would be able to see light at the end of the tunnel make massive strides to be debt free.

Any advice would be grateful as we simply dont understand.

Tixy

Hi

When your bank assess you for credit they look at the total amount of credit you already have and see if you can afford to service all that credit and the additional amount you are requesting from them.
Whilst you intend to consolidate your debt from other banks your own bank cannot force you to do that so they look at worse case scenario, you blow all of the new loan of luxuries and repay none of your exisiting debt off.
It may be therefore that you are being turned down on the basis of affordability of the new loan on top of your exisiting debts.

Also remember it is much harder to get credit these days and many of the mainstream banks apparently seem reluctant to take your total credit facilities to a figure much higher than 50% of your annual income.

It may be that if you are both turned down you'll need to spend a year or so throwing as much as you can to reduce your level of debt and then looking for cheaper options again at that stage.

K_and_N

Hi,

I had a similar situation with Natwest. When I arranged remortgaging with them I was also told that I did not get required internal scoring even though my credit file on Experian is ok.
They then asked me to send them copy of my credit file from Experian and afterwards the credit check for mortgage went fine.
Having said that, I feel what Tixy said above could be right. I tried consolidating my debt over a year ago and I was turned down simply because my debt level was considered to be too high.

K and N

Maximus972

Thanks for those replies guys - appreciate it, its what we thought!! I would even go on-line in the bank and let them watch me use the extra to pay the cards off! but they don't seem to want to help, as long as they get their bonus eh?! Unsure of wether to try elsewhere - what do you think?

K_and_N

From my personal experience, I'd say pay as much as you can for a year or so. Then you can discuss with Natwest again.

You might want to look at 0% balance transfer deal for credit card debt.