Rejected for a loan - is there any point going back to them?

Cardinal-Red

Hi all - wife and I have flawless credit records, and were today turned down for a loan from the bank we hold our current account with.

I'm actually quite angry about it but that's another matter - I was wondering if there is ever any point in approaching them (Santander) and asking them to reconsider, especially if we set out the purpose of the loan (consolidation of 2 car loans both with higher APR) and the fact that the new monthly payment will be lower than the other 2 combined, which they can see being paid out of the account.

Any thoughts?

BugsyBrowne

Cardinal-Red wrote: »

Hi all - wife and I have flawless credit records, and were today turned down for a loan from the bank we hold our current account with.

I'm actually quite angry about it but that's another matter - I was wondering if there is ever any point in approaching them (Santander) and asking them to reconsider, especially if we set out the purpose of the loan (consolidation of 2 car loans both with higher APR) and the fact that the new monthly payment will be lower than the other 2 combined, which they can see being paid out of the account.

Any thoughts?

What are your incomes,credit card limits,balances,missed/late payments.

Remember a consolidation loan is basically doubling your debt and banks don't now for a fact you are going to consolidate them either.

Tixy

People do appeal credit decisions and occasionally have the decision altered. However before doing this I would suggest you work out why you might have been rejected.

As star-fire says the banks don't look on a consoliation loan as the fact that you can afford to service more expensive loans so would be able to afford this instead. They commercially have to take the worst case scenario and decide whether you could afford to service your existing debts and this debt on top when deciding whether to loan you the money (as you might just go out and blow all the new money on a holiday or something and end up in twice as much debt).

Cardinal-Red

Hi folks

Info as requested - combined income of £70,000 (both basic rate IT), loan balance of £9,876 (issued at 8.5% APR and with 24 payments to go) and a credit card with around £5,000 on, being paid off at the rate of £200 a month, 0% deal coming to an end soon.

No missed payments by either of us since 2001.

I understand the point about consolidation - I guess my question is let's assume the bank have taken that perspective, is there any point saying to them "Look it's to pay off these specific commitments" or is it, as you say, the fact that they have no legal/contractual basis to insist that you actually do that?

All things told this isn't all that big an issue so am not upset about it, but we were just wondering whether to leave it there, or press a bit harder.

Cardinal-Red

Forgot to add we also have a second credit card that we use to accumulate Clubcard points for Airmiles, spending around £1,500 a month on, always paid off in full. Credit limit on that is £12,000.

pompeyfaith

Well also taking into account that too many credit searces will go against you there is no harm in finding out why, have got a CRA report and checked it for its accuracy many are wrong I would do this first as you can add a note to correct these.

Maybe they think your commitments are high enough do you really need such a high credit card limit can you reduce this as it will make a difference even if you are not using it all.

With the recent boom and bust and the bad name banks got for lending they are now more proactive and do check affordability which they never did before

Poosmate

I agree with Pompeyfaith regarding the £12k limit credit card. Although in reality you don't use all of that credit it's still there available to you. Looking at worse case scenario, if one or both of you were to lose your jobs that card could be maxed within a few months so they'd be looking at you trying to service (potentially) £27k's worth of debt with no (little) income.

Is the loan the car finance or is that on top of the loan?

Poo

jonesMUFCforever

The APR on the car loan is very good - wht rate were you applying for?

On your salaries the credit card debt should not pose a problem unless there are other factors that you hve not mentioned in your post IMO.