Loan refused - Should I appeal?

phoenix125

Hi all,

I applied for a personal loan with Santander recently and was declined. I have been offered the chance to appeal and was wondering if it would be worth it given my circumstances.

I have a current account, credit card and ISA all with Santander. My current account has a £1,900 overdraft which I haven't yet paid off (though my salary more than covers it each month) and my credit card has £3,000 on it. I am on a £37k salary and have a credit score of 999, with no adverse history and no missed payments ever. I have about £10,000 left on a hire purchase agreement for my car but no mortgage or other personal loan.

The reason for the loan is a mixture of things, a bit of debt consolidation (so the overdraft and CC would be paid off) and a few other things so I put the loan purpose as 'Other'. Would this affect it do you think?

Mainly, is it worth appealing or shall I just apply for a loan elsewhere?

Thanks!

opinions4u

Mainly, is it worth appealing or shall I just apply for a loan elsewhere?

There is a third option. Don't take out a loan and focus on paying down your existing debts.

have a credit score of 999

Why not ask the providers of this number to give you a loan?

Appeal by all means. It costs nothing. But this decline decision should be a wake up call. Your debts appear to be growing and your solution to the issue is to simply borrow more.

It appears to be the old Greek way of doing things. Sooner or later you'll over-extend.

Find out why you keep spending more than you earn and change the habit.

Clive_Woody

phoenix125 wrote: »

Hi all,

I applied for a personal loan with Santander recently and was declined. I have been offered the chance to appeal and was wondering if it would be worth it given my circumstances.

I have a current account, credit card and ISA all with Santander. My current account has a £1,900 overdraft which I haven't yet paid off (though my salary more than covers it each month) and my credit card has £3,000 on it. I am on a £37k salary and have a credit score of 999, with no adverse history and no missed payments ever. I have about £10,000 left on a hire purchase agreement for my car but no mortgage or other personal loan.

The reason for the loan is a mixture of things, a bit of debt consolidation (so the overdraft and CC would be paid off) and a few other things so I put the loan purpose as 'Other'. Would this affect it do you think?

Mainly, is it worth appealing or shall I just apply for a loan elsewhere?

Thanks!

You currently have around £15k of debt. Lenders rarely let you borrow more than 50% of your salary which you are pretty close to already (although you say part of the loan would be for consolidation there is no guarantee to a new lender that this would happen and any new debt would be in addition to current levels). Living with a constant over-draft debt also suggests to a potential lender that your finances are not in the best of shapes.

I suspect you would get the same answer elsewhere and an appeal at Santander would be a waste of your time.

I would look at getting your credit card and OD cleared ASAP before considering additional debt.

chalkie99

You haven't said how much the loan is for but your credit levels would rise to £10k HP + £2k overdraft + £3k credit card + whatever the loan amount is (obviously at least £5 to clear card and overdraft) so you exceed what is generally regarded as the borrowing threshold of 50% of earnings.

Add to that the fact that they can see you are living in an overdraft and on a credit card so you seem to be living beyond your means somewhat.

The lender has no guarantee you will pay down the cards and overdraft with the loan, nor that, if you did, you would simply run them up again.

LovelyLeeds

opinions4u wrote: »

Your debts appear to be growing and your solution to the issue is to simply borrow more.

It appears to be the old Greek way of doing things. Sooner or later you'll over-extend.

Some good advice there, I'd take it.

iolanthe07

Constant living with an overdraft throws up a red flag to lenders, whatever your credit rating. It indicates to them that you are not managing finances well.

Apples2

Why do you have an ISA with so much debt dragging you down?