Struggling to get a loan but credit rating 'good'?!

Angel_Mummy

Long story which I won't bore you with by my husband and I are trying to get a loan to pay off 5 credit cards with balances totalling just under £14k. We had an extension done on our house 4 years ago which cost more than we first anticipated and we lost our son during the work and had to pay for his funeral, hence the high balances.

We are only paying minimum payments on the cards at the moment as that's all we can afford. We want a loan of £14k over 5 years so we can pay off the balances on the cards and finally be debt free!

We have both got our credit reports from Experian, mine is fair and my husband's is good (885) so we decided to apply for two loans in my husband's name - one with M&S which was declined and one with Tesco which we are still waiting to hear about (applied for on 12 March and were told they need to do some more checks and would contact my husband in due course). We opted for these companies as they offered a good rate of interest and payments we could afford over the timescale we would like.

Is there likely to be a reason that M&S declined my husband's application even though his credit score is good? We really want this loan so we can begin to feel like we're getting somewhere towards becoming debt free.

Thanks in advance,
Megan

Bravehearted_2

How much income do you earn.

Already owing 14k and only paying the minimum indicates debt stress and isn't pleasing to lenders.

They see it as you will owe 28k hence you need to bd earning over 56k to stand a chance.

Any defaults, ccjs, late payments? The credit scores mean pants.

Very doubtful you'll get the tesco or any other loan sorry.

bengal-stripe

Angel_Mummy wrote: »

Is there likely to be a reason that M&S declined my husband's application even though his credit score is good?

The reason is. that you owe already 14k and you only pay the minimum. Now you are asking for an additional 14k.

Yes, I know you want to pay off the Credit Cards. But for any lender there is no guaranty that you actually will do it, or, if you do, that you do not run up new debt on the (now cleared) cards.

There is always the possibility, that in a few months time you are in debt not with 14 but with 28k.

Mara69

Angel_Mummy wrote: »

We really want this loan so we can begin to feel like we're getting somewhere towards becoming debt free.

Ummm, see the contradiction there? Unfortunately, as previously advised, you are highly unlikely to get another loan. Head over to the debt free board and post up your SOA. You'll get some really good advice on how to manage your debt without taking on anymore.

parent_of_too_many

Angel_Mummy wrote: »

We opted for these companies as they offered a good rate of interest and payments we could afford over the timescale we would like.

Please remember that the best interest rate offered is only applicable to 51% of applicants. With a credit rating of "good" (which ironically isn't generally as good as the word suggests) I would think you will not be offered this advertised rate?!

DCFC79

Ive said it before and ill say it again, the credit score of 885 of meaningless.

Cant add anythng that hasn't already been said but good luck in getting the loan.