Appealing a loan decline

SHAKERMAKER

I am quite confident that I can win Tesco Bank around by lending me a further advance on my personal loan. But I have never done it before! Any tips?! Should I speak to an Underwriter or just write to them?
Thank you!

SeanG79

You need to write to them, but unless you have documentary evidence to back your appeal, you are unlikely to reverse the decision.

heartbreak_star

...pay off your loan before taking out another?

Have they given a reason for the decline?

HBS x

SHAKERMAKER

They said I have too much borrowing per month. But my monthly borrowing will actually decrease with the loan. I want to clear my credit card and thought about documenting how much per month the minimum payment is costing me compared to extending my loan with them. It is my intention to start a brand new loan by wiping off the old one and starting a new one.

Tixy

Whilst it won't hurt to try an appeal lenders won't usually take in to account that you intend to pay off existing debt with the new loan.

It is usual that they look at whether they think you can afford all your existing debts/commitments and the new loan on top. That is because they look at the highest risk scenario that you don't use the money to pay off your credit card, or that you do but then max out your card again and then struggle to afford all the repayments.

John1993_2

SHAKERMAKER wrote: »

They said I have too much borrowing per month. But my monthly borrowing will actually decrease with the loan. I want to clear my credit card...

Is your credit card with Tesco?

If not, you need to remember that, from their point of view, it doesn't matter that the new loan is more affordable. At the moment someone else is exposed to your default, and you imply that it's becoming a bit of a struggle to keep up with it. If they lend to you, then Tesco are stepping in to your risk. They probably don't want to do this. Better you default with someone else than they risk you defaulting with them.

poppasmurf_bewdley

SHAKERMAKER wrote: »

They said I have too much borrowing per month. But my monthly borrowing will actually decrease with the loan.

How can you decrease your monthly borrowings by borrowing more money?

Surely, if you already have £x borrowings from a loan, then borrow £y more, plus if you have £z in credit card borrowing, then instead of having a total debt of £x plus £z you will have a total debt of £x plus £z plus £y?

SHAKERMAKER

I know it doesn't sound like it makes any sense but my credit card minimum payment is£56/mth my loan is £199/mth if I borrow about £2k more over a slightly longer term (I've got 2.5yrs left so I increase back up to 3yrs) then my loan payment (taking into account my settlement figure) then I will still only pay approx £199/mth.
Does this make sense? I'm effectively borrowing more for a longer term which makes it cheaper per month.

I'm clutching at straws here.
Just organised an arrangement with my bank for my default fees because we aren't in a good way at the moment :-(

John1993_2

From what you say, it relly doesn't sound like Tesco are going to want to lend you money. Banks are noty, in general, keen to lend to people who are struggling, loans are generally there for purchases that you want to fund over an extended period, not as a last-distch effort to avoid a default with someone else.

Borrowing more money over longer might seem like a nice short-term fix, but it will result in you having to pay money back for longer. Far better is to cut back on your expenses for a few months, try to find some extra income, and get eBaying anything that you no longer need.

SHAKERMAKER

I've just got a 2mth holiday payment with my mortgage. That will save me £1016! Financially we will be in a better position come January as my Husband has just landed a new job with mega salary so this is only a short term fix.
Thank you everyone!

bargainbetty

Your suggestion is that you write to them explaining that your current borrowing is making it difficult for you, so you want to borrow more and promise, promise to use it to clear the old debts and not run up any more?

Have you prepared your credit card statements to show that you have stopped spending on it, and are trying to bring down the debt? If you cannot demonstrate that you are not reliant on the card, or have your spending under control, I don't rate your chances on a personal appeal.

I wish you luck though, it never hurts to ask