"Fair Credit Rating" Loan

baseline9

Hey all, my first post here

I was just after some advice / experiences if that's ok?

I have recently decided to look at my finances in great detail as I have moved house and I feel my monthly outgoings are getting too high.

I recently signed up to a free site called "nodle"which provides a my credit reference history (Similar to credit expert), I found it extremely useful and informative and following this I sat down to add up my debts in Excel, to my surprise I had more debt than I thought!

I have decided to take action and look into getting a consolidation loan of about £8k over 4 yrs. I can more than afford the monthly repayments of around £200 to £250 pm and this will give me a saving of about £50 to £100 pm. This is not a huge saving but still very helpful.

However the main driver for taking this action (and thorn in my side!) is to repay my credit card with about a £3k balance on and a 27% APR. The biggest surprise is I found out I have had the card since 2009!

Following a discussion with a loan broker / adviser they said my credit score is quite low because of this credit card, I have had it for so long and I'm operating near the limit, therefore I will struggle to get a loan. They then tried to get me to go down the debt management route however this would not release any disposable income and I don't feel I'm in that much trouble to go down this route.

I have also applied for a P2P loan with zopa who only did a soft print search and was declined.

I have looked at money supermarket smart search and it seems only the very high APR loans (30% +!) are offered to me.

What's a little frustrating is I accept I have a low score and will not get the best rates but I have never missed a payment and have very good affordability. I'm quite happy to get a loan in the 12% to 19% space.

There does not seem to be a lender which caters for my situation, you either fall into the excellent credit rating category or the bad credit rating category

I may also speak to my bank Nat west, I filled in an online personal quote and they said I'm "highly likely" to get a loan at 22.4%. This is a bit on the high side but much better than 30% +
I'm worried I will get declined if I take it further, thus impacting my score.

I just wanted anyone’s thoughts or if anyone knows a lender who would be sympathetic to my situation?

Just a final note I’m a private tenant so unsecured would be the only option for me.

Hope you can help
Many thanks in advance!

Tixy

What debts do you have currently aside from the credit card?

If the credit card is the only high interest debt then perhaps consider looking to see if you are likely to get accepted for a new 0% balance transfer credit card (there is a soft search option on this forum to give you an idea as to whether you would be accepted by various lenders).

As with a credit card you would only be seen as taking on an extra say £3k debt on top of your existing debts, whereas with a loan a potential lender would be looking to see if you can service the extra £8k debt on top of your existing debts.

Regarding the loan broker advice - having had the card for a while should not have any detrimental affect on whether you would be accepted or not. And if you are able to meet your current repayments without increasing your debt then I would agree it sounds like you are not at a point of needing to consider debt management (if you ever did decide to consider this route only use a charity provider who doesn't charge you monthly fees).

Pixie5740

I'd forget about getting another loan. Even if you could get one you're not going to get a great APR as you've found out from NatWest. Snowballing your debts might be the best way to kick your debt into touch once and for all.

http://www.whatsthecost.com/snowball.aspx

The snowball calculator will give you an idea of when you'd get all your credit cards paid off without having to take out further lines of credit. I found it useful when I decided to tackle my debt.

DCFC79

baseline9 wrote: »

Hey all, my first post here

I was just after some advice / experiences if that's ok?

I have recently decided to look at my finances in great detail as I have moved house and I feel my monthly outgoings are getting too high.

I recently signed up to a free site called "nodle"which provides a my credit reference history (Similar to credit expert), I found it extremely useful and informative and following this I sat down to add up my debts in Excel, to my surprise I had more debt than I thought!

I have decided to take action and look into getting a consolidation loan of about £8k over 4 yrs. I can more than afford the monthly repayments of around £200 to £250 pm and this will give me a saving of about £50 to £100 pm. This is not a huge saving but still very helpful.

However the main driver for taking this action (and thorn in my side!) is to repay my credit card with about a £3k balance on and a 27% APR. The biggest surprise is I found out I have had the card since 2009!

Following a discussion with a loan broker / adviser they said my credit score is quite low because of this credit card, I have had it for so long and I'm operating near the limit, therefore I will struggle to get a loan. They then tried to get me to go down the debt management route however this would not release any disposable income and I don't feel I'm in that much trouble to go down this route.

I have also applied for a P2P loan with zopa who only did a soft print search and was declined.

I have looked at money supermarket smart search and it seems only the very high APR loans (30% +!) are offered to me.

What's a little frustrating is I accept I have a low score and will not get the best rates but I have never missed a payment and have very good affordability. I'm quite happy to get a loan in the 12% to 19% space.

There does not seem to be a lender which caters for my situation, you either fall into the excellent credit rating category or the bad credit rating category

I may also speak to my bank Nat west, I filled in an online personal quote and they said I'm "highly likely" to get a loan at 22.4%. This is a bit on the high side but much better than 30% +
I'm worried I will get declined if I take it further, thus impacting my score.

I just wanted anyone’s thoughts or if anyone knows a lender who would be sympathetic to my situation?

Just a final note I’m a private tenant so unsecured would be the only option for me.

Hope you can help
Many thanks in advance!

You say you can afford monthly repayments of around £200 to £250 pm so where is this money currently, is it in a savings account ?

Why not make over payments using the £200 to £250 you have spare ?

Or try the snowballing option suggested by PIxie.

baseline9

Thanks all,

I also have
HP for 3k
Overdraft £540
Very £640 (Buy now pay later)

I also want to pay off my car ins (abt £250) and I think I have a nasty gas bill coming, I've just moved house and changed suppliers. I also owe my parents a little bit (Abt £120)

This all amounts to approx. £7.5 / £8K and I'm unsure what charges I will get for paying the HP off early so I've rounded up to £8k. Any money left over I was going to start a zopa savings accounts and with the extra I'm saving I can add to this, only in small amts to being with.

I'm really clearing the slate clean because other things keep coming and hitting me on the chin, Eg car costs, house moves, recent break up, money I've lent out and not got back etc..

That's the motivation behind the loan

The affordable repayments of £200 + PM would be replacing what I'm paying now to service the above debts

I will look at the snowballing idea and the soft search for a 0% CC on here as well, seems good.

Many thanks

kuohu

Two quite long posts but seemingly no intention to address the real issues and seriously cut back on spending.

Head over to the Debt Free Wannabe subforum.

Good luck.

Vikipollard

Might be an idea to post up an SOA to see where you are spending your money - and what options you have to cut back.


You say you can easily afford the payment, yet you are in an overdraft.


The other concern is what will stop you racking up the debt on the CC again when the things you describe (car costs, house stuff) catch you out? You've had £3k on the CC for up to 5 years already - you are risking ending up with an £8 loan and a £3k CC.


Consolidation works for some very disciplined people. I was never one of those, and ended up as I've just described. Twice. Bigger each time.