Loan declined- maxed credit?

[Deleted User]

Wonder if anyone can advise on my situation.

I am employed, on £28k and have good credit (4/5 on noddle if that means anything). I have no missed payments or such on my credit file, but do have a 14k personal loan which was recently set up to pay off a couple of credit cards and my car finance (9k).

As well as this loan, I have a 5K car finance, taken out for my partner who has poor credit (we have no financial link according to credit agencies). Her car is becoming a hassle, lots of breakdowns etc and it seems a good time to sell it. We have buyer lined up at an amount which will clear the finance.

I have just applied to Ratesetter, Zopa & Halifax for a personal loan of £7k and been declined by all 3. Do you think that this is due to the high levels of existing debt? Would paying the car finance off and waiting a while help with this? How long is this likely to take to be clear off my file?

I also have several open credit cards which all have zero balance and a combined credit limit of approx 11k (no intention of using- these banks make it hard to close a credit card account!).

What's the way forward?

Incidentally, due to my partners poor credit, a joint application for finance looks like a bad idea, we have avoided financial association thus far and I'd like this to continue. From the banks perspective, all this debt is on me with my 28k income where in reality, it is jointly paid by us both on a roughly 55k combined income.

Any suggestion?

Thanks in advance.

rdwarr

Hi,
Around 50% of salary is a reasonable guide to maximum borrowing so I guess that's it for the moment as you're already over. The only way forward I can suggest is to try and pay some loans off rather than take out new ones.
It's not hard to close credit cards - you have to ask if you really want to be rid of them.

forgotmyname

Too many loan applications in a short time = your desperate.

Maybe time for that lightbulb moment they call it on here. Where you work out how much you need to put aside to spend on the main bills and cut back on everything else.

I bought my car for just over £2000 almost 3 years ago and basic servicing and minor repairs its still going strong.

No need to spend a fortune on a car.

How much of your partner's income goes to paying the bad debts?

[Deleted User]

Thanks for the advice both.

To answer your question forgotmyname, my partner actually has no outgoings other than our household bills and the 5k car finance.

Her bad debts are all related to a financial association with her ex. There has been no updates to any of these debts in just over 5 years and my understanding is that they will be cleared from her file in 2 years anyway.

As an aside, I appreciate the sentiment of buying an older car, but my experience is contrary to yours, have owned a few old cars in my time and always find the costs soaring rapidly. My own car, although it cost £9k, has had not a single issue and as I work in a profession which requires client transportation, a nice car is handy.

Situation now is, if I go ahead and sell her car, we may not be able to finance another so we end up stuck with a lemon (it's 4 years old, but, in the last 12 months has needed a new starter motor, clutch, battery & brake cabling). The electronic control unit (if I remember the name correctly) needs replacing before the next MOT too.

tonyh66

you don't replace ECUs as a sundry item during an MOT, it either works or it doesn't and if it doesn't then the car doesn't run properly. Its not even a checkable item on the MOT test.

tara1082

Sfitzter wrote: »

Wonder if anyone can advise on my situation.

I am employed, on £28k and have good credit (4/5 on noddle if that means anything). I have no missed payments or such on my credit file, but do have a 14k personal loan which was recently set up to pay off a couple of credit cards and my car finance (9k).

As well as this loan, I have a 5K car finance, taken out for my partner who has poor credit (we have no financial link according to credit agencies). Her car is becoming a hassle, lots of breakdowns etc and it seems a good time to sell it. We have buyer lined up at an amount which will clear the finance.

I have just applied to Ratesetter, Zopa & Halifax for a personal loan of £7k and been declined by all 3. Do you think that this is due to the high levels of existing debt? Would paying the car finance off and waiting a while help with this? How long is this likely to take to be clear off my file?

I also have several open credit cards which all have zero balance and a combined credit limit of approx 11k (no intention of using- these banks make it hard to close a credit card account!).

What's the way forward?

Incidentally, due to my partners poor credit, a joint application for finance looks like a bad idea, we have avoided financial association thus far and I'd like this to continue. From the banks perspective, all this debt is on me with my 28k income where in reality, it is jointly paid by us both on a roughly 55k combined income.

Any suggestion?

Thanks in advance.

Remind me not to buy a car from you! Make sure you tell any buyers about these problems as you are required to be honest.

SeanG79

Sfitzter wrote: »

Thanks for the advice both.

To answer your question forgotmyname, my partner actually has no outgoings other than our household bills and the 5k car finance.

Her bad debts are all related to a financial association with her ex. There has been no updates to any of these debts in just over 5 years and my understanding is that they will be cleared from her file in 2 years anyway.

As an aside, I appreciate the sentiment of buying an older car, but my experience is contrary to yours, have owned a few old cars in my time and always find the costs soaring rapidly. My own car, although it cost £9k, has had not a single issue and as I work in a profession which requires client transportation, a nice car is handy.

Situation now is, if I go ahead and sell her car, we may not be able to finance another so we end up stuck with a lemon (it's 4 years old, but, in the last 12 months has needed a new starter motor, clutch, battery & brake cabling). The electronic control unit (if I remember the name correctly) needs replacing before the next MOT too.

If its car finance you are looking for, you are much more likely to be approved on vehicle finance (secured on the vehicle) than if you apply for a personal loan (unsecured) with your current exposure. Also if the lender knows you are replacing existing finance they will be more inclined to approve the finance.

DCFC79

If you search correctly and dont rush into things you can find a decent looking car that is a few years old for decent money. Maybe car finance would be a better option for you.

BugsyBrowne

tara1082 wrote: »

Remind me not to buy a car from you! Make sure you tell any buyers about these problems as you are required to be honest.

The customer also needs to be savvy and check Ex mot advisories etc do a little bit of homework on common problems with the car in question and find out if they've been rectified.

Being honest is ok but it's more the customer checking these problems theirselves.

tiggerbodhi

tonyh66 wrote: »

you don't replace ECUs as a sundry item during an MOT, it either works or it doesn't and if it doesn't then the car doesn't run properly. Its not even a checkable item on the MOT test.

If the ECU is on its way out (unlikely as they do or die normally) can cause problems with emissions or control of ABS and other MOT items, IMHO from your posts your are not very car "savvy" and maybe your garage is taking the pee, if the ECU was causing issues on an MOT (it would be noted on the advisories) you should really get it done now not wait a year, might be worth a second opinion though, personally if you ahve spent out already on the car you know those bits are good for a number of years, buying cars in the £5-7K is very risky, go low and there is not the profit in bodging so you are more liekly to get an "honest motor"

[Deleted User]

I agree about not needing to spend a fortune on a car. If you choose a reliable model and do some careful research you can find great reliable cars for much less than you are planning to spend. I bought my car just over 2 years ago for £3000 - its 13 years old now but was in perfect condition, no rust anywhere on the body, full service history, 60 000 miles on the clock. I commute to work every day in it and at weekends to see my family and it has NEVER broken down. Got through 2 MOTs for around £60. I think a couple of new tyres is all i've paid out for