Rejected loans

Mekismo

Hello all,

I'm currently having a bit of a struggle financially, things are getting on top of us and my overdraft is getting increased every month and money is going on credit cards. I'm getting quite stressed about it. I've always paid my bills on time and have an excellent credit rating (according to my Equifax report as of today).

Today I decided that I would get a loan, to pay off an existing loan and a couple of credit cards. I went to Nationwide, my existing loan lender and they told me I was rejected. I then tried Sainsburys finance, which was also rejected. I don't want to apply for any more because I believe multiple credit searches have a negative effect on your rating.

My question is, both these applications were made as joint applications (myself and my fiancee), I'm not sure what her credit score is, but should i try elsewhere as a sole applicant, or is it likely that I might still be rejected? And would a 3rd check in one day be bad for my rating?

Thanks in advance

John

BugsyBrowne

You will be rejected again and again for the next 6 months I am afraid, also no one knows their actual credit score as its confidential to lenders only so take no notice of the scores on Equifax and experian.

If you've been rejected now it's safe bet in 6 months it will rejection again, there is a reason you keep getting declined have you to much debt compared to your salary, if your always in your O/D this can be a concern to any lender.

As it was a joint application you both would of been searched therefore your credit ratings for the pair of you would of dropped somewhat.

DCFC79

Learn to budget, open up excel and do a spreadsheet showing where you money is going each month and cut back on anything that isnt essential.

Why you getting stressed about it ?

tell_it_how_it_is

I'd guess you've probably used up your 'chances' for the time being, so I'd suggest you'll have to dismiss a conventional loan as an option.

On the surface it would appear you are and have been spending beyond your means, so, as mentioned above, consider taking stock of your monthly incomings and outgoings and see where you can save some additional dosh to put towards your debts.

For example, can a £35 mobile phone contract be reduced to a £10 one or PAYG, can SkyTV package be reduced or cancelled for a while, can meals out/takeaways be cut down on etc. etc. All rather boring and miserable, but no pain, no gain.

dtsazza

Mekismo wrote: »

Today I decided that I would get a loan, to pay off an existing loan and a couple of credit cards.

This can occasionally be useful, if you get a noticeable reduction in the interest rate meaning that more of your payment goes to capital.

However it's important to be aware that this doesn't reduce your debt at all - if you take out an extra £10k of debt to pay off £10k of existing debt, you might feel better, but your total debt level is exactly the same. Worse, you typically have the old credit facilities still available, e.g. you could now go on to run up more debts again on the credit cards.

Ultimately the only way to get rid of debt is to pay it off. It sounds like you're currently spending more than you bring in - you need to spend less in order to have spare cash left over to throw at the debts.

The most important thing is to sit down and do an honest budget to work out where your money goes, what your current monthly cashflow is, and what actions you can take to increase income/reduce expenses. From this you can work out how long it will take to pay down your debt.

Once you have a plan like that in place, getting a lower interest loan can be useful to lower interest payments, if you have a rock-solid resolve to stick to your plan and not use the credit cards again. But it seems to be almost impossible to get them these days (lenders usually want to see total debt, i.e. existing + applied for, as less than half your income), so don't feel it's unusual or a personal judgement that you've been turned down. Assume you won't get such a loan, make yours plans accordingly, and you won't be disappointed.

CLAPTON

what's your income
what's your OH income
what are your current debts
whats do your credit files say
what do your OH credit files say

how much did you apply for

Apples2

You are trying to get a loan to bolster your income, this is madness.
Loans should be for single purchases where you have enough spare to make the repayments.

you MUST reign in the spending. It is the only sensible option.

If you spend more than you earn now, this problem will become MUCH larger later on if you get a loan. .

BugsyBrowne

Are you still on AP from a few year back?

opinions4u

Spend less.

27col

How do you think that getting a new loan will help. You will still be up to your eyes in debt. As has already been said, you need to reduce your outgoings first. You will never improve your situation unless you do.
Apples2 has summed it up very concisely.