Can I get a secured loan with poor credit?

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Hi all. My OH and I would like to apply for a secured loan to clear our credit card and loan debts. After much deliberation we have decided that a secured loan is the best option for us as we can only just meet the monthly minimum payments.

The only thing is, we have poor credit and have been refused a consolidation loan with my bank (with whom we actually have a good history). I don't want to start applying for more loans only to be refused and going on a downward spiral. Is it easier to get accepted for a secured loan? If not, are there any reputable companies which have a 100% acceptance? If its of any relevance, our house is worth in the region of £160k and our mortgage is £139k. We need an £18k loan.

Many thanks.
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  • zppp
    zppp Posts: 2,476 Forumite
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    jools02 wrote: »
    If not, are there any reputable companies which have a 100% acceptance? If its of any relevance, our house is worth in the region of £160k and our mortgage is £139k. We need an £18k loan.

    No-one has a 100% acceptance policy for starters. Have you spoken with your mortgage lender to see if they will extend your mortgage for you to pay these off?
    Best Regards

    zppp :)

  • mi33cupc@ke
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    zppp wrote: »
    No-one has a 100% acceptance policy for starters. Have you spoken with your mortgage lender to see if they will extend your mortgage for you to pay these off?

    No I haven't. I didn't really want to increase the mortgage any more, I don't like the idea of paying the £18k off over the next 25 years, I was hoping to do it in more like 3 years.
  • zppp
    zppp Posts: 2,476 Forumite
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    Do you own any other assets at all you could get secured borrowing on?
    Best Regards

    zppp :)

  • NeverEnough
    NeverEnough Posts: 986 Forumite
    edited 13 September 2010 at 10:23PM
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    PLEASE get professional advice about taking a secured loan, which puts your house at risk if you default, against UNSECURED debt. Think it through very carefully - it just doesn't make sense to convert unsecured debts (you can't lose your home by defaulting on a credit card) to secured debt which puts your home at risk.

    Make an appointment with CCCS or the local CAB, or post up a SOA here and people will try to help. There are template letters to write to creditors offering reduced payments while you pay off your most expensive debt first, then you can "snowball" others as they are paid off. Start with a SOA and a budget for advice on here, but also speak to the CCCS or CAB and get advice from them - don't put your home at risk in this way!!!:eek:
  • mi33cupc@ke
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    Make an appointment with CCCS or the local CAB, or post up a SOA here and people will try to help. There are template letters to write to creditors offering reduced payments while you pay off your most expensive debt first, then you can "snowball" others as they are paid off. Start with a SOA and a budget for advice on here, but also speak to the CCCS or CAB and get advice from them - don't put your home at risk in this way!!!:eek:

    Thanks for your advice. We have already done a budget and cut back everything possible. We have both sold our cars and bought one cheap banger. This paid off a small lump. I already spoke to CCCS and not eligible for an IVA and don't really want to go down that route. We have worked out that we can afford a secured loan and there would be no chance of defaulting. We have never defaulted on a loan or credit card. We just can't get a consolidation loan because we already have so much credit.
  • The problem with secured loan firms is that they want to be in it for the long run or hit you with a hefty penalty if you want to redeem. 3 years isnt going to be viable for them. They make money out of trapping people in their own homes, when you come to sell you have to pay their settlement figure. So please consider this wisely. If you have a poor rating they will charge you still big time on the rates.

    Have you thought about debt management for the debts? At least you keep your house out of the equation and you will get a reduced montly payment to keep your heads above water.

    If you went for a secured things might be ok now but think of the "what if" situation. Eg, reduced hours, loss of job, injury etc. Secured loan companies like their money on time and have been known to turn the screw as they have a valid interest in the property.
  • mi33cupc@ke
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    zppp wrote: »
    Do you own any other assets at all you could get secured borrowing on?

    No, we just sold our cars to pay off a small lump. We only have the house.
  • zppp
    zppp Posts: 2,476 Forumite
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    jools02 wrote: »
    No, we just sold our cars to pay off a small lump. We only have the house.

    Then I'm sorry but you can't have a mortgage and separate secured loan concurrently on the same asset. You can only have one secured loan per asset. Hence why all you can do is speak to your mortgage lender.

    I suggest you head over to the Debt Free Wannabee Board for advice on how to go about this. You may also want to see someone at the CAB about this.
    Best Regards

    zppp :)

  • mi33cupc@ke
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    Ok, what are our chances of getting an unsecured loan? Which would be the best company to go to for a poor credit loan?
  • barbarawright
    barbarawright Posts: 1,846 Forumite
    Combo Breaker First Post First Anniversary
    edited 14 September 2010 at 7:46AM
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    Why do you wanrta loan? Please, please look round the forums (both here and the DFW boards) and read what people say about consolidation loans. I can't, offhand, think of a single person who has had a positive experience with one.
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