Refused by my own bank. Apply elsewhere?

jock1967

I've just been refused a loan for £10k by my own bank of 13 years. Is there any point applying elsewhere?

The story is that I applied for 0% deal just 18 months ago and got £15k limit. Consolidated all debt onto that. I applied for another 0% deal last month and was offerred £500 limit! The only things that have changed are that we got rid of a card we weren't using (about £10k limit) and reduced our credit limit from £9k to £4k on another card and so are now up to about 80% of our available credit after paying £4k for a car last year.

HappyMJ

They get kind of annoyed with customers who don't actually pay them any interest. Your usage pattern may have indicated you would not be a profitable customer by opening and closing 0% interest accounts and therefore you were refused.

Yes apply somewhere else but not too soon. You don't want to make it look like you are desperate for money. In the meantime consolidate onto as few accounts as possible and close the unused accounts.

Tixy

How much are your existing debts in total?

Is the £15k limit card thats 0% is coming to the end with your own bank that you applied for the loan with?
Do you have an overdraft with this bank?
Do you use it?

How much do you earn?

jock1967

Tixy wrote: »

How much are your existing debts in total?

Is the £15k limit card thats 0% is coming to the end with your own bank that you applied for the loan with?
Do you have an overdraft with this bank?
Do you use it?

How much do you earn?

Existing debt is £15k; £12.5 k on 0% card that runs out next week, £2.5k on card we pay 18% on (Barclaycard).
£15k 0% is with MBNA, we bank with Santander and applied to them for the loan.
We have a £250 overdraft facility but rarely use it and if we do it's only a couple of pounds.
I earn £46.5k.

Cash_Flow

jock1967 wrote: »

Existing debt is £15k; £12.5 k on 0% card that runs out next week, £2.5k on card we pay 18% on (Barclaycard).
£15k 0% is with MBNA, we bank with Santander and applied to them for the loan.
We have a £250 overdraft facility but rarely use it and if we do it's only a couple of pounds.
I earn £46.5k.

Have you tried Tesco Loans?

jock1967

Cash_Flow wrote: »

Have you tried Tesco Loans?

Not tried anyone else as thought that if my own bank wouldn't consider it, with 13 years of history with them, then no-one else would grant me a loan. Hence the question in the title.

Why do you suggest Tesco Loans?

Tixy

Did the bank give any indication as to why you were refused? Did you apply for a joint loan or just in your name?
Are you financially associated to your partner (or whoever the 'we' is)?

It would seem that you might have been refused on affordability - based on them assuming this was additional debt (which they always do as a worst case scenario) it would be looking at servicing £25k debt on a £46k income.

Could be worth trying to apply somewhere else, but be careful of lots of applications.
You could perhaps try nationwide who have a soft search option that gives you a quotation without a full search.
Assuming your credit file is near spotless then you could also consider zopa for a soft search application. All other lenders will do a full search on your file.

What APR does the £12.5k revert to?

Cash_Flow

jock1967 wrote: »

Not tried anyone else as thought that if my own bank wouldn't consider it, with 13 years of history with them, then no-one else would grant me a loan. Hence the question in the title.

Why do you suggest Tesco Loans?

I suggested Tesco because I borrowed £7.5k @ 8% My salary is less than yours (31k) and at the time I had 7k Credit card debts and a 7.3k Loan. My available credit at the time was just over 20k.

jock1967

Tixy wrote: »

Did the bank give any indication as to why you were refused? Did you apply for a joint loan or just in your name?
Are you financially associated to your partner (or whoever the 'we' is)?

It would seem that you might have been refused on affordability - based on them assuming this was additional debt (which they always do as a worst case scenario) it would be looking at servicing £25k debt on a £46k income.

Could be worth trying to apply somewhere else, but be careful of lots of applications.
You could perhaps try nationwide who have a soft search option that gives you a quotation without a full search.
Assuming your credit file is near spotless then you could also consider zopa for a soft search application. All other lenders will do a full search on your file.

What APR does the £12.5k revert to?

No explanation for the refusal yet but apparently a letter is on its way. I applied in my name though our current account is a joint one. She has a limited income from a small business she runs and no other income (full-time mum). Her credit history is good as far as I'm aware. Mine is Fair but only because we reduced the credit available to us and are now at 80% of max. No late payments, CCJs etc.

The application form asked what the loan was for and I chose the Debt Consolidation option so they should have known it wouldn't be additional debt.

Was considering applying elsewhere but wanted to ask here if it was worthwhile first. Will my bank have conducted a credit search or used existing info from the last 13 years with them to reach their decision?

The monthly rate will be 1.5976% when the 0% runs out.

jock1967

Cash_Flow wrote: »

I suggested Tesco because I borrowed £7.5k @ 8% My salary is less than yours (31k) and at the time I had 7k Credit card debts and a 7.3k Loan. My available credit at the time was just over 20k.

Sounds like your situation was not dissimilar to mine at the moment. Was it recently that Tesco granted you this? Have they a track record as being more 'sympathetic' than other banks?

Tixy

Probably will have run a credit search.

Even though you put debt consolidation a lender will always look at worse case scenario, that you don't use it to clear the cards, or run the cards back up again, so they look at whether you can afford to service the old and new debt.

As a general guide it gets harder to get more credit /loans that take you to over 50% debt to income in the current climate.
Thats not to say its impossible to get a consolidation loan in those circumstances - some peope are able to, but its a good indication that you may find it harder.