Loan advice please!

Drubags

I am looking to get a loan for my wedding this year but I want to find out the best way to go about it. We were planning to save but due to events since booking the wedding this is no longer going to cover the cost.

We need to borrow around £6000 and can afford up to £400 repayments although around £300 would be ideal. I'll be applying for the loan as I'm the only one with a chance of getting one!

So far I've had a quick look at what HSBC can offer me as I've had an account with them for 12 years. They are currently doing 7.5% APR on loans over £7000 (7.6% after their sale ends). So borrowing £7000 over 2 years would work quite well and would cost about £500.

Is the bank usually the best way to go? Not sure where to look really.

Now a few details about my finances.

I still have overdrafts from my degree and teacher training which total just under £4000. I have also just paid off my two credit cards at £500 each. Although I am still going to use them for things like petrol and pay them off in full before it costs me anything. I am hoping to half my overdrafts by easter which is when I'm hoping to apply for the loan.

Would this be the best time to do it?

Another thing to mention is that I have missed a few credit card payments in the past when I was out of work and also a few direct debits although this shouldn't happen again. I'm not sure if this will affect my credit? I also got refused an overdraft extension just over a year ago (it might have been longer) but that's because I wasn't earning enough to justify it at the time.

One last thing I can think of that might affect it is my partner's credit history which is pretty bad including CCJs. I have been pretty careful to make sure we don't have any accounts linked. The only links are living at the same address and some utility bills and our rental agreement has both our names. I really hope this won't link us financially?

I'm thinking people suggest getting a credit report and I want to but not sure where is best to do it or how to go about it as I've already used the free trials a few years ago so I might not be able to do it that way again? I also need to know what to look for on it?

Any advice or suggestions welcome as I've got a little while to try and improve my chances of getting what I need!

Thanks :j

[Deleted User]

in current circumstances missed payments in the last 6 years may mean you wont get a loan
the best place to try usually is your own bank,but as they turned you down for extended od even thats not looking positive,it doesnt sound like a credit report would tell you anything you dont already know

Drubags

The missed payments were sorted within days, would it still make a difference?

Also when I applied for the overdraft, I was barely earning at all which was why I didn't get it as there was no chance of repayment. I can now afford more than the payments mentioned in my post and can prove my earnings so would that not count?

Also, one of my credit cards was accepted after the overdraft was refused, although not with the same bank.

paddyrg

In honesty, speaking as a husband to my princess of 14 yrs, I would strongly advise against taking loans out for a wedding. Yes, it is your 'big day', but what makes it big is your public declaration and commitment of your love, not the sugared almonds. If you have to scale back, scale back a little - family to the WB then all friends to the party afterwards, 1 week honeymoon instead of 2, etc. There is nothing so rotten as starting your married life in debt when you should be carefree and enjoying your new OH. It leaves a yucky taste after the fun ends.

I think you will be seen as 'linked' by any lender if you're getting married, and I doubt you'll get the headline rates they offer. They also see honeymoons as representing bad risk (will you really want to come back and pay off debts if you're off in the Maldives with a new OH?), which again will probably make them feel awkward about the rates they offer.

If you must, your own bank is probably the best place to start, they know what you earn, etc. If they won't lend, other lenders will wonder why too. But please promise me you will really think long and hard about spending a new car on a single day then leaving yourselves £100++ a week worse off for years just when you will be wanting access to cash for couplesy things/babies/etc!! I'm not saying don't have an awesome wedding, just be smart about it!! :-)

Drubags

Unfortunately Everything is already booked so the loan is for final balances meaning there isn't a lot of room to scale back. We aren't having a honeymoon either as I am a teacher and there isn't enough time left in the school holidays to go away as well. We will just have a holiday another time. We go to festivals every year anyway so they are our holidays and a lot cheaper!

Although we would be in debt, the repayments I have mentioned wouldn't leave us unable to live the same as we are now as I already pay the same to my credit cards (just finished that so now tackling the overdrafts).

As much as I do appreciate the advice to think again about the loan (and believe me if there was another option I would take it), I need to find out what I can do to try and better my chances of being accepted given the circumstances. I never planned to be in this situation but for reasons I won't go into - here we are!

Consumerist

I suggest your first move should be to get a look at your credit files. £2 each from the three major CRAs.

If you paid the missed payment very quickly, it is possible the bank didn't bother to make an entry on your credit file.

If your files are clear of late/missed payments then your chances of a loan are improved somewhat.

Drubags

What's the best way to get the credit files? Can I do it online? Sorry to ask more questions!!

Thanks

Drubags

An update!!

I have looked into getting my credit reports this evening and so far Equifax wouldn't let me log in and Experian takes a few days but CallCredit was sorted straight away.

Here's what it said:

Everything seems correct and I couldn't see an mention of my partner - does this mean we are not financially linked?

Only bad thing I could see was on my current account:

AA General code to indicate the account is in early arrears i.e. 1 to 2 months/payments in
arrears

This appears twice recently and once right at the end of the record. So 3 in total. Is this a really bad thing to have? As I mentioned earlier these were probably direct debits when my account was already close to its limit so they were rejected. They were sorted within a week though in each instance.



So assuming the other companies don't show anything different - is my report particularly bad? I'm assuming it's best to wait as long as I can before applying for the loan so that the AA codes aren't as recent?