Can anyone help me understand this please?

StrugglingApprentice

I am currently trying to get a loan for about a year or 18 months of £1000 - £1500.

I have never had a loan before, the only things ive had on credit are a credit card, on which ive never missed a payment, and a phone contract on which ive also never missed a payment.

My overdraft gets paid off every month without fail, but im almost always in it at some point during the month. Ive never gone over my arranged limit.

A few months ago, i was put on an arrangement where my overdraft would be reduced, this is set to end tomorrow when the final reduction takes place.

For some reason, the only place ive been approved for a loan either want a guarantor, for 49.8% interest rate, or solo it goes over 400%

I just don't understand why.

Tixy

How much are you earning currently and where have you approached for a loan?

Do you have a balance on your credit card at the moment? how much?

Are you on the electoral roll? have you obtained copies of your credit files?

If your bank have asked you to reduce the overdraft is that down to nil? or just to less than it was before? it sounds like something has made them consider you a high risk to ask you to reduce it.

CLAPTON

StrugglingApprentice wrote: »

I am currently trying to get a loan for about a year or 18 months of £1000 - £1500.

I have never had a loan before, the only things ive had on credit are a credit card, on which ive never missed a payment, and a phone contract on which ive also never missed a payment.

My overdraft gets paid off every month without fail, but im almost always in it at some point during the month. Ive never gone over my arranged limit.

A few months ago, i was put on an arrangement where my overdraft would be reduced, this is set to end tomorrow when the final reduction takes place.

For some reason, the only place ive been approved for a loan either want a guarantor, for 49.8% interest rate, or solo it goes over 400%

I just don't understand why.

it would seem that you spend a little more than your income: potential lenders may therefore be concerned that you will not be able to repay the loan

maybe time to look at what you spend and aim to reduce that so you can build up a little savings

DCFC79

Maybe post an SOA on the dfw wannabe board, how much is your phone contract for ?

StrugglingApprentice

I have done an SoA and we did highlight some areas i can knock a little off.

i earn 14.5k before tax as a second year apprentice, i owe 2.4k on a credit card which is at 0% until November this year.

The overdraft limit is just being reduced to a lower amount. What caused it is i was earning much less 6 months ago, but since then ive been earning more than i spend and can easily afford the repayments.

ive been turned down by credit unions, my bank and the post office, but i have an appeal in with my bank. They based their decision on the fact that im in an agreement but as of today that arrangement ends.

claret_mike

If you are in a positive position where you are spending less than you are earning, then keep going and clear overdraft and start overpaying your CC. Too many credit searches will be harming your chances. Your bank may still want to see you managing your money for some time. You have just come out of an arrangement, they won't want to be putting you back on an arrangement again when you have another issue down the line.

Seriously, cash is king, just keep doing everything you are to get your positive cash-flow growing and growing.

longtermplanner

why do you want to borrow this money? You don't earn a lot and have 32400 on a 0% credit card which you are going to need to refinance. I suggest that the money you were planning to use to repay this loan should be used to pay down this 0% credit card. Otherwise you are going to have a lot of problems come November refinancing this.

jonesMUFCforever

StrugglingApprentice wrote: »

I have done an SoA and we did highlight some areas i can knock a little off.

i earn 14.5k before tax as a second year apprentice, i owe 2.4k on a credit card which is at 0% until November this year.

The overdraft limit is just being reduced to a lower amount. What caused it is i was earning much less 6 months ago, but since then ive been earning more than i spend and can easily afford the repayments.

ive been turned down by credit unions, my bank and the post office, but i have an appeal in with my bank. They based their decision on the fact that im in an agreement but as of today that arrangement ends.

Sorry but what you say is untrue.
You cannot afford repayments if you are in OD now and have no savings.
It proves the bank is correct in not lending to you.