best unsecured loans for non homeowner.

silkyuk9

Looking for the best deal for £15k for a non homeowner, lots of deals out there for around 4.5% but when you apply they say yes but apr goes up to 16%

Family member wants to put all debt into one basket and if can get a deal for around 5%apr for a £15k loan over 5 years they will be much better off than now, but apr of 16% cripples them further.

They are non homeowners btw

dealer_wins

I would say chances of getting much below 15% are remote for a re-finance loan.

[Deleted User]

The rate depends on their circumstances. If they are looking to consolidate, then a 5% APR is highly unlikely, as I assume they are already carrying a lot of debt.

They are probably better off looking at cutting their outgoings.

Caz3121

silkyuk9 wrote: »

Looking for the best deal for £15k for a non homeowner, lots of deals out there for around 4.5% but when you apply they say yes but apr goes up to 16%

Family member wants to put all debt into one basket and if can get a deal for around 5%apr for a £15k loan over 5 years they will be much better off than now, but apr of 16% cripples them further.

They are non homeowners btw

The 16% will be what the bank has assessed their % to be based on their individual circumstances

When you apply for a loan there are 3 possible outcomes
1) Accepted at the headline rate - must be given to at least 51% of successful applicants
2) Accepted at a different rate - this will be 49% of successful applicants
3) rejected for the loan

So you could have 200 people apply for a loan. 100 are rejected and 51 get the published rate

The published rate tends to be for those with a perfect credit history.

It looks like your family member has fallen into category 2

Borrowing to get out of debt is often not the best resolution, you just end up in debt for years longer and paying more in interest over the years. (been there done that!)
If they look at the debt free board and post up a budget they will get a lot of good help in getting their debt down without necessarily borrowing more money

silkyuk9

Caz3121 wrote: »

The 16% will be what the bank has assessed their % to be based on their individual circumstances

When you apply for a loan there are 3 possible outcomes
1) Accepted at the headline rate - must be given to at least 51% of successful applicants
2) Accepted at a different rate - this will be 49% of successful applicants
3) rejected for the loan

So you could have 200 people apply for a loan. 100 are rejected and 51 get the published rate

The published rate tends to be for those with a perfect credit history.

It looks like your family member has fallen into category 2

Borrowing to get out of debt is often not the best resolution, you just end up in debt for years longer and paying more in interest over the years. (been there done that!)
If they look at the debt free board and post up a budget they will get a lot of good help in getting their debt down without necessarily borrowing more money

I see what you are saying.

The issue is that all the debt mounts to around 12k if they could get a loan for 12k over 5 years the payments would be £100 per month better off.

They can get a loan no problem but the rate is 16% which would make them worse off. The debts to pay off will not be paid in short term so trying to get a loan at the advertised rate would just give them breathing space. The problem is getting that 4.5% and not being offered 16%

My problem with this is that the family member has gone to the bank with all the debts to show where and what is going. The bank will help but they want to make their situation worse, not better.

If they had their own home they proberly would get the advertised rate of 4.5% but because they rent a house they are offered 16%. Wages get paid into bank so no issues that the bank will not get their money.

I just cant believe that the bank can see the situation of whats owed and where but will only help them if they pay 16%.

The bank are offering them a umbrella, but wanting it back when it rains.

[Deleted User]

I don't think they'd be getting 4.5% even if they owned a dozen houses.

The bank has no way of guaranteeing that they will use the new loan to pay off the old debts (unless they are also with the bank). So the risk is much higher than someone with no debt.

What are the other debts they have and at what rates?

Tixy

Do the existing debts have an APR of more or less than 16%?

If they have some high interest debt and some low interest debt then maybe they could look to move just the higher interest debt to a cheaper interest.

You mention them being £100 a month better off - are they struggling to afford the current level of repayments (at the £100 higher than the loan repayments on the loan they are unable to get)?

Brock_and_Roll

Please name and shame any bank that is prepared to lend 15k for a consolidation loan at 4.5% (regardless of any properties owned)...so that I can avoid investing in them!

Given the rate that a bank has to pay for 5yr money in the market, the probability of default on such a loan and the likely loss given a default I doubt the bank would make any money at all even before its administration costs.

somethingcorporate

The bank actually said if they were a homeowner they would get the headline rate? I very much doubt that.