!!!!!!, can't get a loan but can get pretty much anything else

peelie

Hey was wondering if somebody on here could possibly tell me how they work out whether to lend to you b/c it seems to me like its a complete luck of the draw type thing.

I recently applied to A&L for a £7000 loan, the purpose of this would have been to pay off my car finance (£5000 @ 15.9% APR) and to finance a learning to ride a motorbike then subsequently buying a motorbike, my finance payments are £151 per month over 3.5 years i think it was (4 months in) and for a £7k loan over 4 years A&L wanted £175 per month, what a bonus i thought, pay an extra £25 per month and save about £70 on fuel.

Unfortunately though i got declined, should have known really as i have only ever had 1 loan (£2k over 1 year) and that was about 4 years ago, every other loan i've ever applied for has been turned down though, and i havent been making mass applications before its said, this is the first time i've applied for anything in a long time.

The thing thats so frustrating though is this, I have a £5k finance deal for the car i have now, previously i was on a £12k finance deal for my last car at a cost of £250 per month, i have never missed payments on either of these deals, ever, i also have an argos store card with about £300 debt on it which i'm paying, missed one payment when the DD was set up about 1 yr ago, i have also just settled 2 finance deals with HFC of which i never missed a payment, all my payments are set up as DD on the first of the month and i NEVER miss them, i had a look on my credit report and it says satisfactory next to everything i have/had, but my 'score' is only 550!?!?!

I do have a £1200 overdraft with barclays that im in pretty much always as i get paid about £1500 a month, i used to have a £250 'reserve' that barclays do which i have now got rid of as they were charging me about £90 a month for using the bloody thing.

Generally though my finances are in order, like i said, i dont miss payments. The thing that confuses the !!!! out of me though is that even though i can't get a loan for toffee, i get accepted for every finance deal or store card that i apply for, take my first car for example, bought on a £12k finance deal when i was in germany with the army, £12k of finance and yet i cant get accepted for a £7k loan to pay off my finance?!?!

How do i get out of this, its like a bad catch22, i know im in a bad finance deal but i can't get a loan to pay it off, it came back to bite me on the !!! when i part ex'd my old car (worth about £7500 privately) for £6k just because i had outstanding finance on it and no private buyer would touch it, but i couldnt get a loan to pay the finance off and sell privately.

I earn about £22k PA and have about £6000 total made up of my finance for the car and my overdraft, i am not in a bad way at all yet the banks won't give me a loan, what sense does it make to knock someone back for a 7k loan when it will be used to pay off a finance deal that they are already paying almost the same amount towards?!?! I know FOR A FACT that i can pay £170 per month for a loan but i cant get one, instead im stuck on a !!!! finance deal because i couldnt get a loan to pay off my last !!!! finance deal to sell my car privately.

Tixy

Your existing finance is secured on your vehicle, therefore there is not such a high risk as with the new loan you wanted, so is not really comparable in terms of what credit you might get. Plus it is much harder to get credit now compared to a few years ago.

You currently have £5k on the car finance, £1200 overdraft and an argos card with a limit of at least £300 - so at least £6500 available credit, on top of which you want to borrow a further £7k taking you to £13.5k (the fact that you intend to consolidate is not relevant to the lenders).
This is over half your income and could be why you were declined.

CLAPTON

being always in your OD is generally seen as being some-one unable to budget or handle money properly
your history of needing loans seems to confirm that.

peelie

Tixy wrote: »

Your existing finance is secured on your vehicle, therefore there is not such a high risk as with the new loan you wanted, so is not really comparable in terms of what credit you might get. Plus it is much harder to get credit now compared to a few years ago.

You currently have £5k on the car finance, £1200 overdraft and an argos card with a limit of at least £300 - so at least £6500 available credit, on top of which you want to borrow a further £7k taking you to £13.5k (the fact that you intend to consolidate is not relevant to the lenders).
This is over half your income and could be why you were declined.

I never thought about it that way and it makes sense about the finance being secured on the vehicle, no risk for the lender effectively, but why would the consolidation not matter to lenders though?? There was a space on the application for a reason and mine was to consolidate, if the reason for the loan is not relevant then why ask.

CLAPTON wrote: »

your history of needing loans seems to confirm that.

Being a little condesending there aren't we??

Thanks for tarring me with the same brush as most other randoms who come here for advice, my 'history' of needing loans comes from trying to get a £12k loan for my original car, then 3 yrs later a £6k loan to pay off the remaining finance (sensible) so that i could then sell it privately, for an extra 1500, and put the extra money towards my current car (sensible), which i was downsizing to in order to save £100 odd a month after having a new arrival in the family (again, sensible), the only other loan that i have had or even applied for was a £2k one, paid over a year, that i got from barclays when i bought my first car and that was to pay the insurance in a oner, saving me some money, and pay a years road tax, don't know about you but that doesnt sound like someone who is "unable to budget or handle money properly". The only debts to my name are my car which will be paid in 3 years time, a daft little £300 on a store card which is easy enough to pay and my overdraft, which i'm currently working out how im going to get out of.

I do admit though that my overdraft was kinda silly and was taken out a few years back when i wanted to go on the corps snowboarding championships and i didnt have a spare grand knocking around for that, had a feeling i would be turned down for a loan and didnt really know how much i would spend so instead i got the whole 1200 pre-approved overdraft that was on my account and spent that instead.

R0bert_Sterling

peelie wrote: »

Being a little condesending there aren't we??

Thanks for tarring me with the same brush as most other randoms who come here for advice, my 'history' of needing loans comes from trying to get a £12k loan for my original car,

Getting a £12,000 loan without a pot to $$$$ in is hardly good money management.

IF you had bought your first car at a cost which reflected your low earnings you wouldn't be in the mess you are in, your overdraft s almost as much as your earnings!!

Sorry but you need to pull your head out of the clouds and start living within your means.

CLAPTON

peelie wrote: »

I never thought about it that way and it makes sense about the finance being secured on the vehicle, no risk for the lender effectively, but why would the consolidation not matter to lenders though?? There was a space on the application for a reason and mine was to consolidate, if the reason for the loan is not relevant then why ask.



Being a little condesending there aren't we??

Thanks for tarring me with the same brush as most other randoms who come here for advice, my 'history' of needing loans comes from trying to get a £12k loan for my original car, then 3 yrs later a £6k loan to pay off the remaining finance (sensible) so that i could then sell it privately, for an extra 1500, and put the extra money towards my current car (sensible), which i was downsizing to in order to save £100 odd a month after having a new arrival in the family (again, sensible), the only other loan that i have had or even applied for was a £2k one, paid over a year, that i got from barclays when i bought my first car and that was to pay the insurance in a oner, saving me some money, and pay a years road tax, don't know about you but that doesnt sound like someone who is "unable to budget or handle money properly". The only debts to my name are my car which will be paid in 3 years time, a daft little £300 on a store card which is easy enough to pay and my overdraft, which i'm currently working out how im going to get out of.

I do admit though that my overdraft was kinda silly and was taken out a few years back when i wanted to go on the corps snowboarding championships and i didnt have a spare grand knocking around for that, had a feeling i would be turned down for a loan and didnt really know how much i would spend so instead i got the whole 1200 pre-approved overdraft that was on my account and spent that instead.

I've tried to help you by pointing out the way OD are perceived by potential lenders; i.e. basically in a negative way.

Your post seems to have referenced a 2k loan, at loan of 12k, a loan of 5k , a argos Card, and two finance deals with HFC (you dont say whether they were interest bearing).
You may or may not perceive these as showing a history of poor financial management.

Better to have a look at budgetting properly and to get yourself out of debt completely and learn to save first then spend

a good budgeting tool is
http://www.makesenseofcards.com/soacalc.html

peelie

R0bert_Sterling wrote: »

Getting a £12,000 loan without a pot to $$$$ in is hardly good money management.

IF you had bought your first car at a cost which reflected your low earnings you wouldn't be in the mess you are in, your overdraft s almost as much as your earnings!!

Sorry but you need to pull your head out of the clouds and start living within your means.

The 12k loan attempt was about 5 years ago, I was 21, single, in the army and living in germany with no debts, i had about £1200 disposable income coming in every month, thats a pretty big pot to !!!! in IMO obv i could have tucked a lot of that away, and given the chance again i def would, but i was young and wanted a flash car, and why the hell not, growing up with sweet FA all your life and then suddenly having money coming out your ears does that to you.

When i eventually got the finance for that car i was paying £250 per month, leaving me with roughly £250 per week beer tokens which was all i needed

I wish i had got a cheap second hand runner now but you go over to any army base in germany and you'll see literally hundreds of brand spanking new top of the range cars, being driven by kids, seriously like 20 year olds on 20k per year driving round in 18k focus ST's, its nuts.

Maybe i do have a laxidasical attitude towards my overdraft though, but i am trying to get out of it and recently knocked the £250 reserve off, but like you said, its almost as much as i earn so its rather difficult to say the least.

And my debts are coming down not rising which surely means i do live within my means??

peelie

CLAPTON wrote: »

I've tried to help you by pointing out the way OD are perceived by potential lenders; i.e. basically in a negative way.

Yeah i know, i might have been a bit !!!!!! with you, so sorry for that.

I guess i just don't worry too much about my OD, i know its debt but i think in my head it can stay there for all i care b/c it's costing me nothing, but clearly someone looking to lend is going to see that for what it is, £1200 of debt!

fozmcfc

I got declined by A&L for a £5000 loan about 12 months ago.

I too can get credit elsewhere, including in the few months after being turned down, I got accepted for a Virgin credit card with a £6000 limit and a Tesco credit card with £4300 limit.

I think I read somewhere, that with some companies you just don't fit their criteria and will not get accepted by them, despite the fact you will get the same elsewhere from several different companies.

I also got turned down by another company which was part of the A&L group a year or so before that, so I think in my case A&L just won't accept me, only thing I can think of is I'm not a homeowner.

At the end of the day, I'm glad they didn't accept me. The loan was to cover £4300 owed on an Egg credit card and the Virgin card came with 16 months 0% balance transfer so I put it on that and will have paid it off in the 16 months.

Tixy

peelie wrote: »

I never thought about it that way and it makes sense about the finance being secured on the vehicle, no risk for the lender effectively, but why would the consolidation not matter to lenders though?? There was a space on the application for a reason and mine was to consolidate, if the reason for the loan is not relevant then why ask.

The point is you might not consolidate. The lender cannot force you to repay your previous loans. Therefore you could end up with all your exisiting loans and blow all the money from the new loan and might not be able to afford them all.

woody01

Sorry, but it may sound like you have 'topped out' on your available credit.
Your earnings are low and the amount of credit you have is quite high in comparison.