Debt consolidation loans

kyleda86

Hi All,

I am at a pickle and I could do with some advice.

I am 1-2 years out of University and have 2 overdrafts and 3 creditcards totaling around about £5000 that I want to put into 1 loan and start making repayment.

I am paying roughly 70-80 a month in interest and O/D charges at the moment so I know that a low-rate loan is the way forward.

However I recently applied and have been rejected.

So after checking my credit report the only thing that stands out is that i am not on an electoral roll register.

Heres the tricky part, all my bank/credit accounts addressed to my fathers house because I move house atleast once a year and its a pain to keep changing all the addresses. I am currently living in a totally different town (country too) but I think in order to sort my file out I need to be on the electoral roll for my fathers house (the house I lived in most of my life before going to uni)

But will this work considering I don't actually live there. (currently living around 180 miles away)

Any other suggestions to get all this debt into one channel?

HappyMJ

Moving regularly damages your credit rating. The chance of you getting a low interest line of credit approved is very little. You need to have registered to vote as soon as you possibly could and keep that registration up to date.

I'd just concentrate on repaying it as quick as possible to reduce the total interest payable. Although 18% is quite high to pay it isn't really that much per month. You need to cut your expenses right down to avoid going overdrawn again and start clearing your debt.

bargainbetty

You need to move your details to the correct location and get on the electoral register. A loan agreement is legally binding and you are currently providing inaccurate details of your residence.

What is your income? If the total sum of your debts, plus the amount you are asking for adds to more than half of your salary, you might find that is the reason you are being declined. They have no way of forcing you pay off your old debts, so they have to base it on a total sum to check affordability.

Try to get your papers in order, and start throwing all your spare money at the debts. Pay the minimum plus £1 on each, and put all your spare pennies towards the highest interest debt. As the O/D come down, ask the bank to reduce the limits so the temptation to spend again is reduced.

Good luck

DCFC79

You need to get a grip, if you want to sort out your credit file for future eg loans, mortgage then change your address, is it really that hard to change it, dont you just contact your bank adn ask for the address to be changed ?

Are you working at all ?

If not then I cant see you getting a loan.

pheonixrising21

DCFC79 wrote: »

You need to get a grip, if you want to sort out your credit file for future eg loans, mortgage then change your address, is it really that hard to change it, dont you just contact your bank adn ask for the address to be changed ?

Are you working at all ?

If not then I cant see you getting a loan.

Usually, it is very simple, but it depends if you have any products with Santander, in which case it can take them up to five months to change you address and a further year to clean up your credit file after trashing it through their errors...;)

DCFC79

pheonixrising21 wrote: »

Usually, it is very simple, but it depends if you have any products with Santander, in which case it can take them up to five months to change you address and a further year to clean up your credit file after trashing it through their errors...;)

Yes i can imagine Santander would take a long time to process the chnage of address and maybe making an error or 2 along the way.

Apologies if I come across too harsh OP but I still stand by my comment that you need to get things in order.

kaya

Consolidation loans are just a rip off getting you into more debt, how can increasing the amount you owe by obtaining another loan which will require interest and Increase the total payable be a solution? Use you common sense ! Loans , credit and interest payments are the reason you are already in a pickle and you want to get another one?

poppasmurf_bewdley

There is no such thing as a low rate loan, especially for consolidation purposes.

Banks generally charge more for consolidation loans than for other types of loan. Why? Because going in and asking for a loan to replace the one you're already paying 29.9% or whatever on would leave the bank making less money from you, and they don't want to do that.

They can do the maths just as well as you.

pheonixrising21

DCFC79 wrote: »

Yes i can imagine Santander would take a long time to process the chnage of address and maybe making an error or 2 along the way.

Apologies if I come across too harsh but I still stand by my comment that you need to get things in order.

No offense taken, I have all my address info in order and have been on the electoral register since a month after I moved in nearly two years ago...

I was just having a pop at Santander as they really did my head in :mad:

pheonixrising21

kaya wrote: »

Consolidation loans are just a rip off getting you into more debt, how can increasing the amount you owe by obtaining another loan which will require interest and Increase the total payable be a solution? Use you common sense ! Loans , credit and interest payments are the reason you are already in a pickle and you want to get another one?

Depends on if banks change the way they offer consolidation loans to make them work like motor finance. I know they don't, and probably never will...

pheonixrising21

poppasmurf_bewdley wrote: »

There is no such thing as a low rate loan, especially for consolidation purposes.

Banks generally charge more for consolidation loans than for other types of loan. Why? Because going in and asking for a loan to replace the one you're already paying 29.9% or whatever on would leave the bank making less money from you, and they don't want to do that.

They can do the maths just as well as you.

Clearly this is the case if you have a loan with Bank A for £5k at 29% and go into Bank A and ask for one at 9%.

But what if you have £1k with each of Banks A, B, C, D and E at 10-29% range, and then went to Bank F for a £5k loan at 9%. What are Bank F losing? Not taking affordability/risk into account (as you didn't in your example).

Affordability combined with the way they offer consolidation loans (i.e. assuming you double the debt you have) is the reason for high APRs