Will the debt hinder my chances of a loan?

Pippa19

Hi everyone,

I've asked this question to various people and always got a slightly different answer so I am turning you to you guys!

I want to get a loan of around £5,000. I have good credit history, and a £15k a year job, but I do have two credit cards, (1 with approx. £1000 and 1 with approx. £2000) that have a friends debt (helping out a desperate friend - long story) on them - which is steadily being paid off by her, without ever missing a payment.

I want to know:

Will having a total of £3000 worth of debt in my name on credit cards already, harm my chances of getting this £5000 loan?

Even if I get most of the credit card money paid off, will the fact that I still own these cards (and therefore have access to the credit) harm my chances of getting the loan?

Or is having the credit cards not a problem as they are being regularly paid back?

Any answers on this would be really helpful, and I thank you in advance :-)

Apples2

Add up the limits on the credit cards not the current balance.
You could go straight out and spend the remainder as soon as you get a new loan.

If that total is near half of your salary, things start to get difficult for new borrowing.

KingElvis

Yes, having balances available / used on credit cards will affect your chances of getting a loan.

3k+ on cards + 5k on a loan takes you over the golden half salary barrier so expect a rejection. That's also a lot of debt to be having on such a low salary.

Good luck.

Pippa19

Thank for the replies.

So just to clarify, it's the existing cards AND the potential new loan which are added together (that hopefully makes less than half of your income)?

Not just the credit you currently have access to (i.e. the cards)?

Thank you

somethingcorporate

Yes, the available balance on existing borrowing + your request to borrow the loan.

If you end up over 50% chances are you will get rejected.