credit card debt

taximan5419

I am looking for a better option than paying £16000 credit card debts with minimum payments which virtually amount to mostly interest some of which are very high. My bank refused me a £15000 loan recently which would have helped. I am self employed. I have not defaulted on any payments in recent years, but it is getting more difficult to meet my obligations. Any help / suggestions would be appreciated

gb12345

taximan5419 wrote: »

I am looking for a better option than paying £16000 credit card debts with minimum payments which virtually amount to mostly interest some of which are very high. My bank refused me a £15000 loan recently which would have helped. I am self employed. I have not defaulted on any payments in recent years, but it is getting more difficult to meet my obligations. Any help / suggestions would be appreciated

One of the factors that will have contributed to your loan being turned down is the fact that after the loan you would have had £31k of debt.

Unless you're earning over £62k, a loan is 99% likely to be a non-starter.

You need to look at other ways of clearing the debt and if all you can afford is minimum payments then you need to be considering DMPs, but if you haven't defaulted then lenders aren't likely to consider freezing interest as at the moment you are a nice little earner for them.

matttye

Any chance of overpaying so you're tackling more of the debt each month?

It would help if you could post a statement of affairs from here:

http://www.stoozing.com/calculator/soa.php

CherlokHomes

taximan5419 wrote: »

I am looking for a better option than paying £16000 credit card debts with minimum payments which virtually amount to mostly interest some of which are very high. My bank refused me a £15000 loan recently which would have helped. I am self employed. I have not defaulted on any payments in recent years, but it is getting more difficult to meet my obligations. Any help / suggestions would be appreciated

Depending on your salary your credit rating is most probably shot to bits at the moment due to your debt if you say you earn 20-25k.

The bank has refused you a loan so your options are limited.

If you default on the payment your credit report will be screwed for 6 years and you'll still have to pay this back maybe interest free but still have to be paid.

Go Bankrupt where your credit report will also be shot for 6 years but this means you won't have to pay a penny back of the debt.

chattychappy

OP, you say "credit card debits". What are the amounts/APRs? If you can only afford minimums then you're probably stuffed - but still reject any interest hikes that come along.

If you can pay a little more than the minimum, then the usual advice is to pay £1 more than the minimums (to improve ratings) and then any extra to the card with the highest APR. But sometimes it can be worth putting it towards the card with the lowest balance because this might prompt a 0% BT offer.

Have you actually tried applying for a new credit card? Might be worth applying for a 0% card, you never know. Of course this assumes that you will not be tempted to spend more having obtained more credit.

If your income is less than your outgoings, then you're in trouble. But if your income is only less than your outgoings because of the interest, then there is hope if you have room to shuffle.

CherlokHomes

chattychappy wrote: »

OP, you say "credit card debits". What are the amounts/APRs? If you can only afford minimums then you're probably stuffed - but still reject any interest hikes that come along.

If you can pay a little more than the minimum, then the usual advice is to pay £1 more than the minimums (to improve ratings) and then any extra to the card with the highest APR. But sometimes it can be worth putting it towards the card with the lowest balance because this might prompt a 0% BT offer.

Have you actually tried applying for a new credit card? Might be worth applying for a 0% card, you never know. Of course this assumes that you will not be tempted to spend more having obtained more credit.

If your income is less than your outgoings, then you're in trouble. But if your income is only less than your outgoings because of the interest, then there is hope if you have room to shuffle.

How is paying £1 more on a minimum payment going to help someone's credit rating who has 15k of debt when to much debt to income has probably screwed his credit rating up already hence the banks rejection.

CherlokHomes

matttye wrote: »

Any chance of overpaying so you're tackling more of the debt each month?

It would help if you could post a statement of affairs from here:

http://www.stoozing.com/calculator/soa.php

What did you do Mattye when you had loads of Debt or have I got the wrong person?

chattychappy

Innovate wrote: »

How is paying £1 more on a minimum payment going to help someone's credit rating who has 15k of debt when to much debt to income has probably screwed his credit rating up already hence the banks rejection.

It will still help - it is still recorded if you only pay minimums. I have more than 15K CC debt (twice that) and have no problems getting credit. It might also prompt existing customer offers once he has cleared a balance.

We don't know the OP's income - only that he is struggling to make the payments. This could be for a variety of reasons other than debt repayment.

We don't know why he was rejected for the loan - but different lenders have different criteria, particularly for different products.

Since you only have to pay £1 more than the minimum to avoid the marker, it is still worth doing.

Davie2909

£16000 on credit cards wow your payments must just be tickling the interest.
If you have been refused a loan from one provider it may be worth your while speaking to the CAB and see what they can do for you.

taximan5419

gb12345 wrote: »

One of the factors that will have contributed to your loan being turned down is the fact that after the loan you would have had £31k of debt.

Unless you're earning over £62k, a loan is 99% likely to be a non-starter.

You need to look at other ways of clearing the debt and if all you can afford is minimum payments then you need to be considering DMPs, but if you haven't defaulted then lenders aren't likely to consider freezing interest as at the moment you are a nice little earner for them.

the bank knew I intended to pay off the credit cards thus reducing my outgoings

gb12345

taximan5419 wrote: »

the bank knew I intended to pay off the credit cards thus reducing my outgoings

No, they knew that you had told them that you intended to pay off your credit cards. They have no way of ensuring that you do so, so they will underwrite you assuming the worst case scenario and that is you getting the loan and then blowing all the cash on stuff, leaving you with £31k of debt.