Loan refused by Tesco

martd

Hi all,
I was looking to consolidate all of my debts (£20K ish) and decided to go for a Tesco loan.
I filled in all the details online stating my outgoings and giving the reason for the loan as "To consolidate all of my outgoings"

At the end my application was refused due to too may outgoings!

I called Tesco and spoke to a helpful (although somewhat under-informed) guy on the phone who told me that I would be sent a letter shortly to explain what i already knew, and that I would need to follow the "appeals procedure"

Does anyone know if a) this will show up on my credit score, b) if the appeals process is worthwhile and c) any suggestions of what I can do next??

Thanks in advance

rising_from_the_ashes

Yes the search will be recorded on your credit file

Tesco are quite stringent on their lending - although you've put "consolidation" - they have no way of knowing you're actually going to do this and your level of available credit will therefore be a lot more than it is now.

Consolidation is rarely the best way forward - over 85% of people who do it end up in more debt.

Pop over to the DFW board, post up and SOA and I'm sure you'll get loads of advice on how to make savings to free up cash to clear the debts / which debts to tackle first. HTH

Tixy

1)A credit application search will show on your credit report. It won't show whether you were accepted or declined.
2) occasionally can be, depends on the reason for the decline

My guess would be that you have been declined because they don't think you can afford to service a £20k loan on top of all your existing debts. Whilst you've put your intend to consolidate the new potential lender cannot force you to do that with your money or cannot stop you running up your credit cards etc again, so they always look at a worst case scenario that you blow the lot, end up in £40k worth of debt and then judge whether you can afford repayments on all that debt based on your income and situation.

Malky

What's being a recent school leaver (if thats the case) got to do with anything? Sounds like they were just following a procedure after a failed application. To answer your questions.
a) Yes.
b) Probably not.
c) Pay down your current debts.

YorkshireBoy

rising_from_the_ashes wrote: »

your level of available credit will therefore be a lot more than it is now.

Assuming any credit cards and/or loans are not paid off (and closed) the level of 'available' credit will be the same won't it? It's the 'used' credit', ie debt, that will increase.

fozmcfc

Agree consolidation is not normally the answer, done it twice myself and ended up doing what Tixy said twice. Many others have as well.

You probably won't be able to get any sort of loan unless you are earning in excess of 80k a year, because for the reasons Tixy said, they will look at it as 40k of debt. Generally lenders will lend upto 50% of someones annual income.

The only place that possibly would offer some sort of consolidation otherwise would be your own bank, particularly if a lot of the debt is with them.

For instance say £15k of what you owed is with them on credit cards and a loan, the bank may be willing to lend further, on the provisio, that the cards are paid off and closed and the loan is also re-financed.

For more advice, you really need to give some more detail, such as what you owe and the APR's. It may be possible to juggle some debt around to make it cheaper, such as onto lower APR cards. You may even be able to get a 0% APR credit card for xx amount of months and shift the highest debt to it.

rising_from_the_ashes

YorkshireBoy wrote: »

Assuming any credit cards and/or loans are not paid off (and closed) the level of 'available' credit will be the same won't it? It's the 'used' credit', ie debt, that will increase.

If he has the loan & doesn't pay the debts he will have 20k debt + £20k loan = £40k

If he does clear the debts he will have £20k loan + £20k available credit = £40k

So whichever way you look at it, in the bank's eyes he's increasing his potential debt by a huge amount - they can't force him to use the loan to clear the debts IYSWIM

DCFC79

martd wrote: »

Hi all,
I was looking to consolidate all of my debts (£20K ish) and decided to go for a Tesco loan.
I filled in all the details online stating my outgoings and giving the reason for the loan as "To consolidate all of my outgoings"

At the end my application was refused due to too may outgoings!

I called Tesco and the guy on the phone (recent school-leaver?) told me that I would be sent a letter shortly to explain what i already knew, and that I would need to follow the "appeals procedure"

Does anyone know if a) this will show up on my credit score, b) if the appeals process is worthwhile and c) any suggestions of what I can do next??

Thanks in advance

For future reference.

chanz4

tesco will ask for 3 months bank statments from you

chalkie99

DCFC79 wrote: »

For future reference.

LOL Very sharp!

RichGold

martd wrote: »

I called Tesco and the guy on the phone (recent school-leaver?)

http://www.youtube.com/watch?v=d7-BlWbPV1s&feature=related