Graduate Loan to consolidate debt

MAbdi

Hi I am a recent graduate and started full time work 2.5 months ago. I haven't had any financial products from my bank but when I updated my details they offered me £1,500 in interest free overdraft and £1,500 credit card (which has to be paid in full each month).

During my studies (all the way through masters) I have racked up lots of high interest credit card / pawn broking debt. Now I was trying to pay back most of it but I find that each month I hardly pay back any of the principal.

For that reason I was thinking of taking out a Graduate Loan from my bank (HSBC) to consolidate all my credit card / pawn broking debts.

A few details about my financial circumstances:

Income:
- Net monthly income: around £1,500

Expenditure:
- Rent (including bills): £210
- Credit cards repayments: around £400
- Pawnbroking interest payments: around £100
- Travel Card: £100
- Living expenses (food, cloths, mobile, etc.): £500
= Total expenditure: on average around £1,300

So each month I find myself not having enough left to repay a good chunk of my principal debt.

I wanted to take out a Graduate Loan from HSBC of around £10,000, repayable over 48 months, for the purpose of debt consolidation. This would come to around £225 a month which I can afford. This would also give me the flexibility of repaying higher amounts each month in to order to repay the debt faster.

Although I have a large amount of short term debt I have never missed a repayment or paid late. On my credit expert report score it says I have an excellent credit rating, however, it oddly doesnt show my credit cards any longer (it used to show before).

I was wondering if you could give me some advice on the likely success of getting a loan of that size with my bank (have been with them for 4.5 years). Or if I would be deemed to high a risk since I have too much short term debt from too many lenders (3 credit cards and 2 pawn brokers).

I am conscious of not ruining my credit score by applying for loans, which is why I am running it through you guys first.

Thanks.

DCFC79

No 1 can say how likely it will be to get a loan, being in your job for a short time might go against you.

heartbreak_star

If you have more than half your yearly salary in debt it might be frowned upon.

HBS x

19lottie82

MAbdi wrote: »

Expenditure:
- Rent (including bills): £210
- Credit cards repayments: around £400
- Pawnbroking interest payments: around £100
- Travel Card: £100
- Living expenses (food, cloths, mobile, etc.): £500
= Total expenditure: on average around £1,300

this seems a LOT. One person can easily survive on £150 a month for groceries, and £10 is enough for a decent SIM only plan.

Where is the rest of this £500 going?

If you budget properly, you could use this to put towards debt repayments.

ViolaLass

I agree, that £500 a month is a huge amount. OH and I spend £150 on food and cleaning things together. I then have another £180 a month for clothes/fun etc but could easily cut that if we needed to.