Want a loan to consolidate debt, but can't get credit.

DNKDNK

Hi all.

I don't have a massive debt problem. I have £1000 left of a loan with Natwest. About £1700 across 3 credit cards, a £500 overdraft on my NatWest account and a £300 overdraft on my Halifax account.

It's not a case of me not being able to afford my monthly repayments, they are very affordable. What I don't like is having multiple payments to make each months, multiple different direct debit payments, and whilst I could pay more I keep just paying the minimum payments on the credit cards "incase" I need the money for something later in the month. So I am pretty much just paying the interest off and the balances themselves aren't decreasing. I'm currently paying about £170 a month in repayments, which again is including minimum payments only. I have three current accounts with 3 different banks.


I wanted to take out a loan of approximately £3500 to consolidate all my debt. Everywhere was offering payments of about £70 a month over 5 years. It would have given me extra income each month (I'm currently looking at moving into my own apartment so that extra £100 a month would be very usefull). It would also mean that my payments each month would actually be paying off the debt whereas at the moment the majority of that is just minimum payments. I also wanted to be able to close down my Halifax and NatWest accouts to make things generally more managable.


However I keep getting declined everywhere I apply. I don't have bad particularly bad credit, there may have been literally one or two occasions where a direct debit payment may have been late by a month, but the the accounts were bought up to date within the month. I actually work for a bank owned company and wouldn't have got the job if I had bad credit. I used to subscribe the credit monitoring service so have seen my reports so there is nothing on there that I may not be aware of.


I originally had a bank account with the Halifax, with which I have a £300 overdraft and a £500 credit card with a balance of about £430. I then got a job working for an RBS owned company so had to open a NatWest account to have my wages paid in. I had a loan with them which was about £2750, now down to £1000 with no payments late or missed, and a £950 credit card with a balance of about £900 and a £500 overdraft.

I then went to work in the same industry but for Lloyds , again I had to open up a Lloyds account to have my wages paid in.

I have applied with all three banks, advising them it was for debt consolidation and this would then be my only debt. They all declined me.

Lloyds (who employ me), wont even give me a £300 overdraft so that I can clear my Halifax overdraft (which I am currently paying £15 a month for, even though I don't do anything else with the account) and close the account down.

I have applied with Nationwide and Abbey/Santandar. I always get a big fat sorry no thank you.

I have tried calling and actually talking to real people rather than doing online applications but none of them seem interested.

Does anyone have any advice or had a similar situation? Is it really that bad to get unsecured credit these days? I keep hearing about people who have alot more credit card debt etc than me going out and getting car loans or loans for holidays.

Its not like I have a lot of debt or that I'm looking for a large amount.

I guess my only option will be to try and be strong and put as much money away each months as I can and try and pay the credit cards off one by one, but they make it so easy to just pay the minimum that I know I will struggle to do it.

Any advice or comments appreciated.

billypre

If the repayments are "very affordable" at the moment then you must have excess money each month i am assuming. I would say put this excess money to good use and start actually paying off the debts you have just now, instead of just making the minimum payment on each. Once you pay one debt off then that frees up more cash to pay off the next and so on. IMHO you don't need a loan, you need to focus your money on paying the debts you have, rather than increasing your debt.

DNKDNK

billypre wrote: »

If the repayments are "very affordable" at the moment then you must have excess money each month i am assuming. I would say put this excess money to good use and start actually paying off the debts you have just now, instead of just making the minimum payment on each. Once you pay one debt off then that frees up more cash to pay off the next and so on. IMHO you don't need a loan, you need to focus your money on paying the debts you have, rather than increasing your debt.

Thanks for the reply and advice, and I totally agree. However as I alluded to earlier, as they are credit cards and I know that I only have to pay the minimum amounts should I choose to, that I will do just that. I don't like paying out much more than I have to on payments at the beginning of the month incase I need the money for something later in the month. Thats why I would love it if they were actual loans rather than cards, that way I know that what I'm paying off each month is actually decreasing the balance, and I have one fixed amount to pay each month and know that paying that fixed amount each month means everything would be paid off in full in 5 years, rather than doing what I'm doing now, paying more about 150% more with some of them never really getting paid off.

I guess what I may do is actually save until I have enough put buy to pay off a certain debt. Like save £300 and pay that card off in full, then save another £500 and pay off the next card in full etc.

It sounds strange but unless I'm actually paying the card off in full and cancelling it there and then it doesn't feel like I'm paying anything off it or that i'm any better off!

CLAPTON

paying only the minimum on a CC is now viewed as some-one in financial trouble
living permanently in OD is viewed as not managing money well

start a serious campaign to pay back the debts
-always pay a little more than the minimum on each CC and then pay as much as on the debt with the highest APR and taking account of the any fees on the OD accounts

DNKDNK

CLAPTON wrote: »

paying only the minimum on a CC is now viewed as some-one in financial trouble
living permanently in OD is viewed as not managing money well

start a serious campaign to pay back the debts
-always pay a little more than the minimum on each CC and then pay as much as on the debt with the highest APR and taking account of the any fees on the OD accounts

Thanks. I think this is what I am going to have to do. I think alot of it is I am just so suprised that I haven't been able to get the credit.
As stated I haven't got bad credit at all really, and it's not like its a huge amount. The fact that it is a loan for consolidation, with the debt spread across 3 banks, I would have thought one of them would have saw it as an opportunity to make extra money that the competitors were currently getting.

talana

DNKDNK wrote: »

I don't like paying out much more than I have to on payments at the beginning of the month incase I need the money for something later in the month.

Don't follow your logic.
Pay the money off the cards anyway, especially as you don't sound as if you're struggling each month.
If it turns out you don't need the money later in the month, all well and good.
If it turns out you do, couldn't you just pay the bill with the card?

plum44_2

Please don't take out a loan- you risk just increasing your debts . Clear off you credit cards asap and don't waste your hard earned money on paying the institutions interest.

PNPSUKNET

cca lloyds lol

DNKDNK

talana wrote: »

Don't follow your logic.
Pay the money off the cards anyway, especially as you don't sound as if you're struggling each month.
If it turns out you don't need the money later in the month, all well and good.
If it turns out you do, couldn't you just pay the bill with the card?

I cut the cards up months ago.

fozmcfc

OP,

I think you just need to work out exactly how much your income is and how much you are paying out each month on everything, not just debts.

I would do a SOA (statement of affairs) and post to the debt free wanabee board for some great tips and advice on where cuts can be made etc...to help you start to clear off the debt.

I got refused a consolidation loan and at the time I was really disappointed and quite angry. But it turned out to be the best indication and encouragement that I had now finally reached the time I needed to get serious about my debt.

I found at first, the worse thing was not actually working out just how much money I had left on an average month. Once I had worked it out, I could see where I was overspending and put a plan of action into clearing my debts.

You sometime don't even need to cut out anything, just prioritise the most costly debt and work on it and soon you'll find you will have more and more spare money to throw at other debts.

ViolaLass

DNKDNK wrote: »

Thanks for the reply and advice, and I totally agree. However as I alluded to earlier, as they are credit cards and I know that I only have to pay the minimum amounts should I choose to, that I will do just that. I don't like paying out much more than I have to on payments at the beginning of the month incase I need the money for something later in the month. Thats why I would love it if they were actual loans rather than cards, that way I know that what I'm paying off each month is actually decreasing the balance, and I have one fixed amount to pay each month and know that paying that fixed amount each month means everything would be paid off in full in 5 years, rather than doing what I'm doing now, paying more about 150% more with some of them never really getting paid off.

Two thoughts:

1. Make a second payment at the end of the month, when you know how much money you have left.

2. Can't you pretend it's an 'actual loan' (although how a credit card isn't a loan, I don't know)? Work out how much you need to pay each month to pay everything off in 5 years, then pay it.

At the moment, you just sound like you'd like the loans to all go away without you having to pay for them. I think you need to take responsibility for where you are and do something about it.