Loan Approval

sabbracadabra

First post, so go easy on me

I have been trying to apply for a debt consolidation loan and have been declined. I have checked my credit report online and have a good credit score, I think the reason for my declined applications is my debt/income ratio and the fact I hadn't updated my address on the electoral register (I have now done this). I wrote a letter to Halifax (my bank) who I have had 2 previous smaller loans with (never missed a payment, etc) asking for my application to be reviewed by a manager, provided lots of info (monthly income/outgoings, etc).

Has anyone else ever tried this? Were you successful, unsuccessful?

Thanks in advance.

[Deleted User]

until you appear on the ER then probably no chance,and a high income to debt gearing wont help either

sabbracadabra

I am on the electoral register at my previous address which I had declared on the application, I just didn't realise that I hadn't updated the new one until now.

Is there any way that they can bypass what their computer systems tell them and have an actual human being make an informed decision?

Caz3121

how much is your income, your existing debt and the amount you are trying to borrow?

Although you may be planning on paying off your existing debts with the loan, there is nothing that forces you to do this, so they will be looking at existing debt plus new loan as the total v's your income

Apples2

sabbracadabra wrote: »

Is there any way that they can bypass what their computer systems tell them and have an actual human being make an informed decision?

All a Human is going to do is to tap your details into a computer and hit Enter. You will simply be rejected face to face.

The days of Captain Mainwaring bafooning his way into throwing the banks cash out in any direction are long gone.

What is your level of debt?
What is your income?
What are the combined limits of all your credit cards?
Are you financially linked to anyone (mortgage), if so, what is their information (what do their credit files say?)


EDIT: Here you go
http://news.bbc.co.uk/1/hi/scotland/highlands_and_islands/7881185.stm

Interesting term to use is Informed Decision. The banks don't want to lend to people who are likely to struggle. Someone who has borrowed so much they find themselves struggling to repay will fit that criteria nicely.

sabbracadabra

My debt is at £15000 (I was incredibly stupid when I was younger)
My income is £18000/annum
Credit cards/Store Cards come to £13500 (Overdraft is £1600)
I'm not linked to anyone financially.

I am trying to borrow £15000.

Everything is on a relatively low interest free rate as I have done balance transfers but the problem is that I just am not paying any major amounts off as I find myself dipping back into the money I am paying off as I'm not left with enough to live on.

I've been in touch with a debt advice charity and they've recommended a Debt Relief Order but I'd rather pay off my debts instead of having them wiped.

guesswho2000

Unfortunately, your debt to income ratio is far too high. Even if you currently owed nothing, your chances of getting a £15k loan on an 18k salary are next to zero...

You're best (maybe only) option will be to (chop up/freeze in a block of ice/give to your parents) your cards, or indeed do anything which will stop you using them.

Work out a budget (draw up an SOA perhaps) showing exactly how much you've got coming in, then what's going out on essentials (including CC minimum payments I suggest), allowing yourself an amount to spend each month and using the rest to chip away at the debt, prioritising the highest interest rate or the 0% offer ending soonest.

This should help you to bring it down a bit during the 0% periods - at the end of these, your existing cards may have offers for existing customers so you could possibly shuffle around what's left, keeping it at a low rate. Alternatively, when the 0% rates start to expire, if you've paid off enough you may be in a better position to get a loan to clear some of the cards off.

Apples2

Your intentions are honourable but sadly unlikely to happen.

The Golden unwritten law is to have no more than 50% of your Salary as unsecured debt.
For you that means no more than £9k

You are already at £15k and asking for another £15k bringing your total up to £30k (they cannot assume you will use the money to shift your other debts into the new loan).

fwor

sabbracadabra wrote: »

Everything is on a relatively low interest free rate as I have done balance transfers but the problem is that I just am not paying any major amounts off as I find myself dipping back into the money I am paying off as I'm not left with enough to live on.

This is the fundamental problem with "consolidation" for someone in your position. If your debts are at low rates then "consolidation" won't help that aspect of your life in any way.

If anything it will make things worse. Instead of several smaller debts that you can attack one at a time, you end up with just one huge one which is psychologically more difficult for most people to deal with.

As above, seek advice on how to cut back your spending - it is the only real way out of the problem.

guesswho2000

fwor wrote: »

...you end up with just one huge one which is psychologically more difficult for most people to deal with...

This. However, having all the debt in one place, for some, brings it home as to how much you actually owe.

For example, I personally would find 7x cards with £1k on each much less daunting than 1x card with £7k on it.

A loan also has the set monthly payments and inability to revolve the debt and re-borrow what you've repaid, which is exactly what it sounds like the OP needs (EDIT: I do agree that taking out a loan at any rate of interest to clear debt at 0% is a bad idea).

Unfortunately, my post above details why this is unlikely to be an option.

sabbracadabra

Having one payment each month instead of 6 would actually make things better for me, especially knowing that it would actually be clearing the debt and I can't touch any of the money I am paying in.

I have made a budget and am doing my best to stick to it. I don't buy anything but essentials, apart from the odd thing. My problem was when I was down, I would spend on my cards online and I have managed to curb that.

Thanks you all for your advice, it's given me a well needed kick up the backside. I'm away home after work to cut up my cards and remove them from my online accounts. I think if I chip away at it and manage to get it down to a lower level while I have the 0% rates, hopefully I should be able to consolidate the rest.