Secured Loan For Debt Consolidation

stephenba

Hello, firstly thank you in advance for any information anyone can provide.

My wife and I are looking to take out a loan of about £15k secured on our property so to clear our existing debts (credit/store cards and about 1.5 months of mortgage arrears). Our credit rating is poor due to some terrible money management in the past (missed payments etc) but we want to correct this hence the reason for the loan. Our circumstances are as follows -
My wife is employed and I am newly self-employed with a combined annual salary of about £30k.

Property is worth about £375k and we have plenty of equity in it (about £300k) and as mentioned, we are looking for about £15k.

My question is this -
Is obtaining such a loan from a lender realistic in the current climate taking into account our poor credit rating?

Thank you for reading.

barbarawright

Have a look at other threads about debt consolidation and see how many people say it worked for them. Then consider the consequences if it doesn't work for you.

stephenba

barbarawright, thank you for your reply. Yes I have looked at other replies and noticed the number of people who have done the opposite (so not consolidating and in fact increased their debt further). We really do want to clear the debts and start afresh and just wondered if a reputable lender would work with us?

Again, I appreciate your your time.

SeanG79

Do you really want to risk your property converting unsecured debt into secured debt??? With your previous history, I would be very wary of going down that road...

stephenba

SeanG79, yes valid point of course and we are the first to admit that previous finance management has not been good.

We will give it serious consideration. If we did decide to proceed however, would a lender entertain the application based on our history? (poor credit rating but with decent equity etc).

Thank you.

SeanG79

Based on your past credit history and the mortgage arrears you mentioned, no "high street" lenders are likely to consider the risk, the lenders that would consider the advance, will all be sub-prime and will charge "high" rates.

stephenba

Understood. I appreciate your input.

barbarawright

BugsyBrowne wrote: »

How's the neighbourhood watch getting on Barbara?

If you mean do I still find homophobia offensive, yes I do and yes I am prepared to quote the offensive post of yours I reported.

Back to the thread, do think very carefully about securing a loan on your house. The usual advice (and it's very good advice) is to ask on the Debt Free Wannabe board if anyone has any suggestions on how to reduce your outgoings. It's amazing how many people don't realise their tv/internet package or heating bills or grocery spending are stupidly high simply because they never been able to compare their expenditure with people in a similar position

DCFC79

By all means ask your own bank as generally if they wont lend then no other lender will, theres no guarantee they will lend though.

fatbelly

barbarawright wrote: »

...do think very carefully about securing a loan on your house. The usual advice (and it's very good advice) is to ask on the Debt Free Wannabe board if anyone has any suggestions on how to reduce your outgoings. It's amazing how many people don't realise their tv/internet package or heating bills or grocery spending are stupidly high simply because they never been able to compare their expenditure with people in a similar position

I think this is good advice. Do a Statement of affairs (link is to calculator - format for mse and remove links before posting).

It's a bit worrying that you have income of 30k but are getting behind on a 75k mortgage and are thinking about clearing the arrears with a secured loan:eek:

malcolmffc

Why not sell your property and buy a cheaper place with your £300k in cash? With no mortgage payments you should be ableto pay off your debts easily.