Advice on cheap CC-Loan; Borderline credit history?

Cash-Strapped.T32

Evenin' all, first time on this board..
I'm looking for a bit of Credit Card/Cheap Loans advice please, let me see if I can make sense of it..


Right, I'm looking to take out a loan within the next month, £3.5-£4k, over 2.5 to 3 years depending on the exact amount.
I'm looking to pay back roughly £150 a month, although I can be flexible with overpayments, and being a little bit OCD I insist on keeping at least 2 or 3 months' worth of repayments aside in an insta-saver at all times which I will add to slowly & use to overpay if in the end it provides any benefit to do so (already in place).


Salary 13k pre-tax, so this 4k loan would be getting close-ish to 50% of take-home territory, depending on the lender's point of view.
However, I have low outgoings.
My bank will be aware of this, so I have much more confidence they will lend to me rather than other, cheaper lenders, but at a higher rate o/c.


Because of this relatively large amount I require, and a poor record (poor in that I assumed I had little history, not a particularly bad history), until now I had assumed my bank was the only way to go, and like a numpty had done little homework on the alternatives.

However, upon reviewing my Equifax report in more detail it's not quite as empty as I had assumed, which is almost good..

All my personal details & electoral roll, etc.. are in order - Good.
Overdraft agreement with my main current account in order - Good (£400 avail used but not currently)
Overdraft agreement with secondary current account in order - Good (£500 avail not used)
Current Credit Agreement with mobile operator in order - Good
1K, 1year Personal Loan with bank closed in good order last year - Good.
Credit agreement with store card 2003/5 - several missed or late payments - Very very bad.


Now, you can guess why I'm posting on this board - it's because I'm considering the MBNA rate for life card - Martin's calc puts the APR at about 7% for my timeframe taking into account the fee, which all-in jumps all over the personal loan rate, and my desired timescale of 2.5/3 years makes the "for life" part ideal, better than any 0%, but time-limited offer.

Don't get me wrong, I could afford to take the loan (I'd be wary of looking for ways round it otherwise), but I'd be an utter fool not to do the MSE thing. :money:

So, while my recent (2004 +) history is in good order, I have a sketchy history in the past, so I do not wish to adopt a strategy which relies on multiple credit searches or applications for more 0% cards later, which could be declined easily at the whim of a lender's algorithm.

Forgive all this lengthy pre-amble, but my credit-record is borderline I feel, so I wanted to give you as full a picture as possible.



What I would like to know in detail please, is if I apply for the above Rate for Life card, and rather than all-out decline they decide to set my limit at say, £2k, or £2.5, am I free to decline their offer, with a (further) tarnished credit history?

In short, would it appear as if I had been declined, making future attempts all the more difficult?


Or is there some other way around this predicament?
The card is only of use if the limit is high enough to act as my cheap-loan, and my record is sketchy enough such that if the limit is too low, I cannot be assured of finding further cheap credit to make up the remainder of 4K.

Obvious answer is the bank - Say MBNA offer me £2.5K, so I apply for a personal loan of a further £1.5K, concentrate on knocking that out in a year or 8/10 months, and then take advantage of that 7%ish rate for life on the remainder.
Not quite a steady 7% for the full term, but still far better than a full term @ 19%.

The thing is, if I go to the bank & apply for £1.5k of credit (not pocket money by any means), within a day or two of accepting a £2.5k credit card, well, that's not going to look very favourable is it?


As you can see, I am a bit at sea with this - I (think/hope) I have an adequate handle on the possible issues, but I don't have the experience to make many judgements on them, like my likely limit, how recent applications will affect further credit, etc..


Any advice & opinions would be greatly appreciated - I can afford this loan, have planned (albeit in other areas ) for it & it is for a positive purpose (not chasing further debt), but like everyone here I cannot afford to waste money, so if you've read this far, hell you've earned my thanks already. :cool:

[Deleted User]

if you get a loan for 3.5-4k the interest rate will be high,probably around 15% apr and overpayments arent allowed on most personal loans,so if you want the option to make additional payments then a cc is the way to go

Degenerate

Cash-Strapped.T32 wrote: »

Credit agreement with store card 2003/5 - several missed or late payments - Very very bad.

When in 2005 did this finish? It's due to drop off your file after 6 years.

Cash-Strapped.T32

Good question.

Ironically, it was ended in May (ended in April '05) which is ironic in that I will have to move on this in April at the latest, but most likely within this month of March, meaning that for the sake of 2 months, my credit history gets "extended" as it were back to '01, & includes the above-mentioned missed payments.

Would make life easier if I could just sit on my hands for a couple of months, & sit pretty with no blemishes on my record, but unfortunately I think events external to this matter will make that a non starter, as I really do have to decide now-ish which route to take.


The crux of what I am trying to get at this this though;

Say I apply to MBNA online - Rather than all out decline, they offer me a credit limit which is too low to act as my loan - Will I be informed of this limit on the website once they accept, but before I return the credit Agreement?

Or will I only learn what my limit is, *after* I sign the agreement and the account becomes active?


You can see why I ask;
If they set too low a limit the CC will not act as a suitable cheap "loan", and so I need to option to decline their offer (it's not me, it's you), so that I could still get a personal loan for the full amount required if that turns out to be my only option.

Obviously I'd rather take the cheaper, CC-esque loan & be a bit MSE about it, but I'd rather take the hit & pay the higher interest of the Personal Loan than end up with a useless CC account and no loan at all because the bank thought I had too much available credit..

Thanks for the advice so far.