secured loan only way?

continualdiamond

We want to borrow £25,000, using it to consolidate our current debts plus have a good enough amount left over to do up our bathroom, kitchen and back garden.

We applied with liverpool victoria who declined but as we applied online it then searches for other companies. One rang and took some more details but then said its secured loan.

What do people think to this? Where awaiting a phone call back on the decision. We bought our flat for £82,000, ground floor. A 1st floor flat is up for sale on our street and its risen in price by £2000 since December, now on the market for £82,950 and it much need of decor than ours.

Im nervous about securing on our flat, but at the same time it could be the last resort to have our flat totally modern and finished, we'd look to sell in 5 years time. Where already having double glazing finished off to the back of the flat (already done at front when purchased).

I hate it that companies decline loans when we've worked out a budget and can afford this loan we applied for, otherwise we wouldn't of bothered applying.

brownie2

Hey,

Secured loans do tend to offer preferential rates due to the act you put your house at risk! £25k is the limit for personal loans which you can repay over a term of upto 7/8 years I think. What debts are you looking to consolidate? If it's credit cards could you look at making sure you've got the best deal etc, obviously be careful not to let your credit ref take a hammering with loads of searches. Have a look at snowballing ( think the site is https://www.whatsthecost.com) to see when the debts can be repaid rather than consolidate everything outstanding. That way you could look at taking a lower loan which could look more favourable in the eyes of the lender. Have you looked at your credit report as to why you were turned down by liverpool. Experian are doing a 30day free trial for you to look at your report.

continualdiamond

Don't mean to come across as rude, but been there done that when it comes to checking credit reports, checked for both myself and my fiancee 2 mths ago to make sure everything on it was ok and it was.

We'd consolidate 2 credit cards, 1 loan and our overdraft. Again no option to look at 0% as we never get approved for them only get those high apr offers through the post.

Can only see our non approval trend to do with our ages (25 & 24) and having moved 3 times in 3 years.

House 1 - rented 9 mths (no credit at this house)
House 2 - rented 2 years, took out loan at 10.9% and 2 credit cards
House 3 - mortgage, bought in Oct, no credit except mortgage of course.

This £25,000 would make everything better long term, my fiancee has the 2 credit cards and we only manage to chip off £20 a mth off the balance, take us years to pay it off. We can afford the whole £25,000 over 7 years and our flat would be complete........

Debt_Free_Chick

continualdiamond wrote:

This £25,000 would make everything better long term, my fiancee has the 2 credit cards and we only manage to chip off £20 a mth off the balance, take us years to pay it off. We can afford the whole £25,000 over 7 years and our flat would be complete........

I don't think you'd get approved for a secured loan of £25k. The reason it's secured is that the lender takes a charge over your flat - so they would expect to see more equity to cover the loan.

Effectively, you are saying .... I'll give you (a charge over) the £2k equity in my flat, in exchange for a loan of £25k.

If you defaulted, they would never get their money back - and that's all they're interested in, when they offer you a secured loan.

Have you considered the Debt Free Wannabe Board, where folks can look at your financial situation and make some suggestions?

continualdiamond

Basically we have no choice but to consolidate. Where getting no where with paying my fiancees credit card payments and pay nothing off the overdraft.

As stupid as it sounds, the £25,000 over 7 years with the apr is lower than what we pay now for our £17000 worth of debt.

Our only other option is a £10,000 loan and pay off 1 credit card balance of £6132 and do up the bathroom/garden cheaper.

We'd still be paying the same repayments now but have some of the flat done up...

regularsaver1

could they have declined you on affordability? based on their criteria

HeadInSand_2

continualdiamond wrote:

We want to borrow £25,000, using it to consolidate our current debts plus have a good enough amount left over to do up our bathroom, kitchen and back garden.

We applied with liverpool victoria who declined but as we applied online it then searches for other companies. One rang and took some more details but then said its secured loan.

What do people think to this? Where awaiting a phone call back on the decision. We bought our flat for £82,000, ground floor. A 1st floor flat is up for sale on our street and its risen in price by £2000 since December, now on the market for £82,950 and it much need of decor than ours.

Im nervous about securing on our flat, but at the same time it could be the last resort to have our flat totally modern and finished, we'd look to sell in 5 years time. Where already having double glazing finished off to the back of the flat (already done at front when purchased).

I hate it that companies decline loans when we've worked out a budget and can afford this loan we applied for, otherwise we wouldn't of bothered applying.

A 1st floor flat is up for sale on our street and its risen in price by £2000 since December
Until it's sold the asking price is irrelevant, it could be up for £100k next week, doesn't mean it's worth that. Check nethouseprices for actual sale prices.

brownie2

I work in mortgages, and people who wish to do equity release loan etc are vastly over-estimating their house value 'next doors went up for £x amount but mine must be worth way more than this because of x,y and z' This is until the valuer goes round and gives them a reality check.