Consolidation Help Required

wenger2012

I have 3 Debts that I would like to consolidate into one payment because of their high interest rates. One is 39% the other two are around 29% apr. My credit history isn't good as I have a default notice on my history although this has been settled and was 5 years ago. I have a Platinum Select Account with Nat West and am in full time employment with a good regular income. I've been turned down for a loan with Nat West and am seeking to borrow £10,500 over a 3 year payment period. My current payments total £430per month which is affordable but would have been paying considerably less if the Nat West Loan had been approved. The debts are 4k Car Finance, 3k credit card and Littlewoods 3k. The Car Finance and Littlewoods are both connected to Moneyway/SecureTrust Bank. They also offer Personal Loans at 19.9% apr but they won't consolidate my borrowing with them to that rate as they are obviously making more money with the current arrangement. Does anyone know if Moneyway could be obligated to refinance me? Or of a Lender not a Broker with up front fees who offer and who I would have a chance of being accepted with who offer unsecured loans with an apr of around 20%? I realise my credit history says that I will have to pay more for finance but I could pay the 3 debts off much quicker and with less interest if I can find an alternative? Thanks in advance! Jon P

DCFC79

What's your salary then ?

You can ask those who you owe to if they refinance what you owe but they aren't obligated to do so.

19lottie82

If you borrowed 10.5k to consolidate, that would bring your total borrowing to 21k.

As a rule of the thumb, lenders don't like to borrowers to have more than 50% of their annual salary, as debt.

So, you would be earning at least 42k to realistically, hope to borrow this amount.

wenger2012

My Salary is 35k per anum

wenger2012

But if I'm consolidating my debt I would owe 10.5k as the money borrowed would pay off the original 10.5k at the higher interest rate

gb12345

wenger2012 wrote: »

But if I'm consolidating my debt I would owe 10.5k as the money borrowed would pay off the original 10.5k at the higher interest rate

IF you pay off the original loan. The underwriters will assume the worst case scenario - which is that they lend you 10.5k and you go out and spend it on "stuff" and end up owing 21k.

DCFC79

wenger2012 wrote: »

But if I'm consolidating my debt I would owe 10.5k as the money borrowed would pay off the original 10.5k at the higher interest rate

Yes thats your intention but the underwriters dont know that it is your intention to do that.

19lottie82

wenger2012 wrote: »

But if I'm consolidating my debt I would owe 10.5k as the money borrowed would pay off the original 10.5k at the higher interest rate

Doesn't work like that. You can't pay off the original debt until you get the loan, so your TOTAL debt would equal £21k.

And, as already pointed out, there is nothing stopping you spending the money on fast cars and loose women, rather than consolidating your original debt.