What constitutes a consolidation loan?

Rda89

Long story short,

I have a few debts outstanding which I'm eager to just get rid of (I'm happily making the payments, and paying nearly 300% of the minimum payment on my credit card) so I'm considering a loan at a lower interest rate to just pay off existing ones and use a bit extra for a car as I currently have a company car I'm possibly handing back.

Due to the nature of the loan, would this be classed as consolidation or a multi purpose loan.

Quick finance stats for reference;

Earnings : 28000 p/a.

CC remaining: £780
Current loan remaining: £930 @ ~22% APR
Outstanding finance on another car: £9k (thereabouts)

I was looking at a 15k loan over 3 years @ 4.6%

Thoughts / likelihood of acceptance?

forgotmyname

4.6% Very doubtful.

I think your going to need to declare that the money is going to pay off other finance. They may query why you have a £9k loan for a car yeat want £15k for another one.

They could be worried about you taking £15k and spending it and not paying off the other loans.

Whats wrong with the car your owe £9k on?

Rda89

I'm basing the 4.6% purely on calculators based off my current situation! I spoke to my bank regarding a 10k loan and declared that some of it would be used to pay off existing debts and they gave me the green light on affordability and such (I wasn't going to say yay or nay on a loan there and then) on a 16% loan which is still lower than my current rate.

I don't currently own the car that finance is with, due to downsizing an old car, rolling the finance over then selling the car due to getting a company car, the finance is just sat there ticking away.

I'm capable of just staying as I am but I don't like having multiple payments at random times of the month to different companies, perhaps my OCD around this is more the issue

HatimKater

You will have to explain it to the bank that the loan is being taken to clear off your other debts. Otherwise they may be apprehensive about granting you another loan.

gb12345

Rda89 wrote: »

Thoughts / likelihood of acceptance?

Probably non-existent - you will be looking at total credit well in excess of your salary.

HatimKater wrote: »

You will have to explain it to the bank that the loan is being taken to clear off your other debts. Otherwise they may be apprehensive about granting you another loan.

The bank will take that with a pinch of salt as they will have heard it all before and many time the consolidation won't happen and there will be a disaster waiting to happen with huge borrowings they can't afford.

But nice try - keep it up and you'll soon be able to post your :spam: