Loan Help Needed

Audi_Driver

I looking for some advice on a taking a unsecured / secured loan.

I am coming to the end of a PCP finance deal with my car and my settlement figure at this stage is £9,600.00 I also have £4K on a credit card and I have an existing loan from my bank of £8K (now settlement figure £6K) that I took out last year to create a 3rd bedroom and new kitchen in my home.

I am looking to consolidate this all to 1 monthly payment by borrowing £20K. I had hoped my bank (Bank of Scotland) would have helped but they refused me, I also applied to M&S for a loan and they refused me also

I have no idea if my credit rating is good or bad, I assume its not great hence the 2 refusals. I did put my details on to The Loans Engine who found an unsecured loan of £20K (Rate Setter)- £483/month for 60 months (APR 16.9%) however not sure if paying circa £9K for borrowing £20K is the greatest of deals

I earn £52.5K PA and currently pay out £883/month on the 3 debts mentioned.

PeacefulWaters

I have no idea if my credit rating is good or bad

You can pay £2 to find out.

But more likely lenders think you've borrowed too much so lending you more is a bad idea.

You appear to earn good money. Time to start reducing your debts and save up for stuff.

ViolaLass

What are the interest rates on your current deals? No point consolidating if they don't improve.

Audi_Driver

I had thought about the experian credit check but I read online somewhere (I think here) that it was all a bit subjective and each lender has a diff criteria so what they tell u is a guess anyway

My credit card is with capital one and on the £4K balance £65 of the £130 I paid this month is interest.

My Bank of Scotland loan is £370.76 pm and I have 17 mnths remaining (The APR is 10.9%).

I pay £405.18 pm on my car my final payment is due in Oct 14 which will be circa £7200, the £9600 is a settlement now.

If accept the loan it will only be £78.36 more than what I have been paying for my car. But can't help thinking borrowing £20K and paying back £29 is not great

ViolaLass

The amount per month is lower because you're paying it back for longer. The APR for the amount on your card would be going up - why on earth would you want that?

Mara_uk7

perhaps you should be looking to see where your 52K per annum is vanishing to before you look to borrow more money ?

Audi_Driver

I know were my £52K PA goes to
After Tax it is £35K and paying all my debts as listed plus, mortage £470, c/tax £140, tv / b/ban £80, utilities £160 plus fuel and groceries takes me to the wire.

Admittedly my kitchen is nearly paid of £210 pm (final payment Oct 14) and my sofa £90 pm (final payment Sept 14).

So in 6-7months I will also be £300 pm better off.

The person at The Loans Engine said I could pay more per month than the £483.00 which would reduce the amount paid on interest.

I am making good money but not doing the best with it, which is why I am on here looking for advice.

ViolaLass

Audi_Driver wrote: »

I know were my £52K PA goes to
After Tax it is £35K and paying all my debts as listed plus, mortage £470, c/tax £140, tv / b/ban £80, utilities £160 plus fuel and groceries takes me to the wire.

Do you live on your own? You should be able to manage fine on nearly £3k a month, with plenty to spare for your debts. £160 on utilities seems rather a lot, for example.

Admittedly my kitchen is nearly paid of £210 pm (final payment Oct 14) and my sofa £90 pm (final payment Sept 14).

So in 6-7months I will also be £300 pm better off.

The person at The Loans Engine said I could pay more per month than the £483.00 which would reduce the amount paid on interest. But the interest rate will still be higher than that on your card.

I am making good money but not doing the best with it, which is why I am on here looking for advice.

Get to debt-free wannabes and post there. I suspect you could manage your spending more efficiently which would allow you to throw more at the debt. Some rough numbers suggest that you could be throwing £500 a month more at them, which would make a dent very quickly.

Audi_Driver

I live with my partner our 2 sons (5 month and 6yr old) and my partners 18yr old daughter.

Everything is in my name and my partner pays my £350 pm to help with the Bills.

The whole point of consolidating was to get it to one manageble figure, I appreciate it is for 5yrs but with it consolidated to £483 I could be effectively making extra payments of £400.00 which potentially could increase to £700.00 in 6 months.

My bank loan was 10.9% so maybe 16.9% is not that bad

Audi_Driver

I was tempted to try another few loan applications (Hitachi Personnal Finance) are doing decent loans with reasonable APR but I don't want to negative marks on my credit history which is why I haven't

thegrind

Audi Driver,

IMO 16.9% APR is an insult. Some banks are offering 5% loans representative.

The problem I see is maybe the reason for the loan, did you state that it was for consolidation because as far as banks are concerned this means you're in a desperate situation with paying back multiple loans. There is also a consensus that people that consolidate debt tend to take on more debt using the previous channels they cleared with the consolidation loan.

Doesn't sound like the banks want to take the risk with you.