Rejected for loan for debt consilidation purposes, dont know what to do?

Rarchy

I need a loan of around £8400. I know people will say, I dont need but want, but seeing as it is for debt consilidation purposes in my mind I do need it.

I have around £3k on credit card (which was one large spend, but only been paying the minimum mostly), £1000 into my overdraft and more importantly a friend lent me £4800 in order to pay off other debt. One of the agreements was if she needed it back I would get a loan. I applied for Santander online as they are my bank and had a decent rate for that range, but was told today its been declined.

I am not sure why I have been rejected as I spoke to them on the phone and they couldnt tell me but said it would say in the letter.

As my friend is now looking to buy property she does need this money back, and therefore I need to find it from somewhere, plus the extra I am paying huge interest (19.5%) on - I guess was naive to think it would be straight forward. I thought about getting a smaller loan for £5000, and also transfering my balance on my cc to pay that off, but then it means two payments each month which I guess is harder to pay off than one?

I am on £22,500, renting, apart from cc and overdraft no other financial commitments. I can afford up to £200 a month now as my salary just increasesd (was £20k before) which would have covered the loan I was looking for over 5 years.

Now that it has gone onto my credit history that I have been rejected I am not sure what to do?

Basically I realise I have been overspending and would like to try to find a way to pay it back so I can reorganise and not get in debt over my eyeballs, but I feel there is no way for me to do this!!

If anyone can offer any advice I would be very grateful

Hax

Hi

You best bet for advice would be to make a post in the Debt Free Wannabe section of the forums, including your SOA.

Have a read of this thread (click me!) and then use the link to the SOA calculator.

Hopefully, folks will be able to offer you some helpful advice on how to tackle your debts and spending.

Good luck!

Rarchy

thank you, that does look useful for the long term in terms of reducing outgoings, so I will post on there as a way to help myself not get into debt again because I do need to do something about it.

However, my main problem right at this moment is I do need a loan of at least £4800 to pay back my friend who needs it back asap. Unlike my credit card and overdraft which I can shuffle around and pay back slowly, I need to pay this back quickly.

I realise and admit it was extremly naive of both of us to think it would be so straight forward if she wanted it back for me to get a loan, I honestly didnt think it would be a problem. So now I am wondering, should I apply for another loan? I just dont know how to magic £5k out of no where :-(

And please, no lecturing, I realise now that borrowing this money from her wasnt the best idea. there is no ill feeling between us and we have both stuck to our word, but I'm genuinly stuck on what to do.

CLAPTON

what do your credit records say?

but basically these days living in an OD and only paying the minimum on a CC are seen as some-one who is in financial trouble

can you increase your income... parttime job maybe?

Rarchy

Unfortunately at the moment a part time job is not an option as I am already working late most days in my normal job! I try to do focus forums to make some extra csh, but dont get picked often and again working late means I#m not free much!

I checkede with callcreditcheck and it says 3/5 credit rating 603. Apparently I may be occasionally rejected. I have used the same address for all finance related stuff for a long time (ie parents addresm so over 25 years), make all payments on time, all the boxes ecept one from 2006) on all accounts and direct debits etc are ticked green.

I know this is just one company and I also signed up for Equifax, but have toc all them apparently and their offices are closed. Can't do experian as already did their free trial 8 months ago!

I do agree I have found myself in trouble, and so now I am taking a very serious look at trying to sort it out for once and for all. I just wish I could find a loan to pay back my friend!!

zppp

Rarchy wrote: »

Unfortunately at the moment a part time job is not an option as I am already working late most days in my normal job! I try to do focus forums to make some extra csh, but dont get picked often and again working late means I#m not free much!

I checkede with callcreditcheck and it says 3/5 credit rating 603. Apparently I may be occasionally rejected. I have used the same address for all finance related stuff for a long time (ie parents addresm so over 25 years), make all payments on time, all the boxes ecept one from 2006) on all accounts and direct debits etc are ticked green.

I know this is just one company and I also signed up for Equifax, but have toc all them apparently and their offices are closed. Can't do experian as already did their free trial 8 months ago!

I do agree I have found myself in trouble, and so now I am taking a very serious look at trying to sort it out for once and for all. I just wish I could find a loan to pay back my friend!!

Sorry to be the bearer of bad news, but if your own bank has declined you, it is unlikely you will find a loan for the amount you need, from a reputable lender. If you are successful, expect a high rate of interest if your own bank has declined you.

I suggest you find out the reason for the rejection (await Santander's letter) stating why it was rejected i.e. credit scoring, affordability etc. This will give you an idea why you were rejected and if you need to check something out.

Once you have that information we can advise further. Otherwise, all I can suggest is that you pay your friend in installments.

byrnedolly

I know how you feel! Unfortunately most banks have now revamped their lending criteria, which basically means, they won't really lend money to anyone unless you earn a six figure salary, in which case you obviously don't really need a loan.
Two years ago I was able to borrow £7000 with an annual salary of only £12000. I have repayed this loan now, but found myself needing another one, for exactly the same purpose as you, paying off credit cards. I only wanted £5000 but I got rejected. They said I had too many committments. Funny how they didn't really care about that 2 years ago. Banks seem to have forgotten, that one of their main purposes is to lend money to people and charge interest for it. I am struggling all the time to make ends meet,just because I made a few financial mistakes over the last few years. A loan would really help me, but I have no chance. So I face another few years of living on the edge of poverty, and before anyone tells me off,I don't smoke or drink or go on holiday or buy clothes.It's just bills,fuel and feeding 2 teenage kids.Good luck to you anyway!!

Thrugelmir

Rarchy wrote: »

I do agree I have found myself in trouble, and so now I am taking a very serious look at trying to sort it out for once and for all. I just wish I could find a loan to pay back my friend!!

Tackle your overdraft before anything else. As this is a clear signal that you are living beyond your income. This will at least start to address your credit rating for the longer term.

ViolaLass

byrnedolly wrote: »

Banks seem to have forgotten, that one of their main purposes is to lend money to people and charge interest for it.

And make sure that the interest will be paid and the capital returned. They're businesses, not charities.

opinions4u

byrnedolly wrote: »

Unfortunately most banks have now revamped their lending criteria, which basically means, they won't really lend money to anyone unless you earn a six figure salary, in which case you obviously don't really need a loan. Two years ago I was able to borrow £7000 with an annual salary of only £12000.

Salary is actually a very small part of any credit scoring system that I've ever worked with.

I have repayed this loan now, but found myself needing another one, for exactly the same purpose as you, paying off credit cards. I only wanted £5000 but I got rejected. They said I had too many committments.

Perhaps the credit scoring system looked at your ability to increase your debts, considered the economic situation and the higher risk of loans to consolidate debts elsewhere and thought you were high risk.

Banks seem to have forgotten, that one of their main purposes is to lend money to people and charge interest for it.

A bank's main purpose is to generate a return for its shareholders. They've been pretty poor at that over the last couple of years, partly through overlending to numpties who don't pay them back. So limited good quality lending makes a lot more sense than unlimited uncontrolled lending.

I am struggling all the time to make ends meet,just because I made a few financial mistakes over the last few years.

So you're financially incompetent and expect them to lend you money?

Tiddlywinks

byrnedolly wrote: »

Unfortunately most banks have now revamped their lending criteria, which basically means, they won't really lend money to anyone unless you earn a six figure salary, in which case you obviously don't really need a loan.

That's just not true - the banking sector has tightened its criteria and now looks more carefully at affordability; quite rightly in my opinion.

byrnedolly wrote: »

Two years ago I was able to borrow £7000 with an annual salary of only £12000. I have repayed this loan now, but found myself needing another one, for exactly the same purpose as you, paying off credit cards. I only wanted £5000 but I got rejected. They said I had too many committments. Funny how they didn't really care about that 2 years ago.

But part of the reason we are in so much trouble now is the irresponsible lending of the past.

byrnedolly wrote: »

I am struggling all the time to make ends meet,just because I made a few financial mistakes over the last few years. A loan would really help me, but I have no chance. So I face another few years of living on the edge of poverty

I feel for you but this is not a situation of the banks' making..... and you have to see it from their point of view - you are struggling now so could you manage to service a loan?