excellent credit rating but refused a loan. What's the point?

dresdendave

angie1979 wrote: »

Hi,

My friend is in a right pickle at the moment. she is trying to consolidate her credit card of £8000 and to buy a new car needing a further £7000, so in total needing a £15,000 loan.

Once again, someone who can't differentiate between "wanting" and "needing".

27col

angie1979 wrote: »

Well it's not looking very good for her then! Maybe she should go out and get drunk she might feel better for a little while! Thanks for your help.

Or, perish the thought. She could opt for a cheaper car.

angie1979

Hi guys,

Appreciate what you are saying. But she travels 60 miles a day round trip! No she doesn't have any kids, or a mortgage to pay for. In fact she doesn't even pay rent. There would be no point buying a cheaper car that will not survive the long distance she has to do each day.

I have already put that option to her, it's needs to be a car that will last a good 3 years or more doing those sort of miles.

Considering she doesn't have much else to pay for I don't see £15k being a problem. However I do agree that she should have sorted her finances out long before now. Let this be a lesson to her!

angie1979

Oh and it's not that she wanted any of this or wants to buy a really expensive car. She needs to in order to get to work and earn the money that she earns.

superbigal36

Lease a nice shiny car over 3 years with 20,000 miles pa allowed.
Without much research I can see a Volkswagon Up at £133.75 a month inc vat.

Caz3121

angie1979 wrote: »

she is trying to consolidate her credit card of £8000 and to buy a new car needing a further £7000, so in total needing a £15,000 loan. She tried Sainsburys which has the cheapest rate at the moment. Her credit score was in excellent. She earns £30k a year with no major bills other than the above.

angie1979 wrote: »

No she doesn't have any kids, or a mortgage to pay for. In fact she doesn't even pay rent.

Has she only recently started this job? With £2k per month take home pay and no rent or mortgage, how has she racked up £8k in debt and also has no savings. She would probably be best looking at the debt free board and get advice on how to manage her money better
The loan rejection could well be down to affordability (as has been said they will see this as £23k debt against a £30k salary) If she has tried and been declined for 0% cards it sounds like her credit history is not quite as squeaky clean as she thinks. Borrowing to get out of debt is not really addressing the debt or the reason she needed to rack up debt in the first place

molerat

Earns £30K, no major expenses yet has credit card debt and no savings - can you not see the problem the banks see with her financial affairs ? Leasing may be the way forward but what will happen at the end of the lease ?

burlington6

She sounds like a weekend Millionaire

FireWyrm

angie1979 wrote: »

Hi guys,

Appreciate what you are saying. But she travels 60 miles a day round trip! No she doesn't have any kids, or a mortgage to pay for. In fact she doesn't even pay rent. There would be no point buying a cheaper car that will not survive the long distance she has to do each day.

I have already put that option to her, it's needs to be a car that will last a good 3 years or more doing those sort of miles.

Considering she doesn't have much else to pay for I don't see £15k being a problem. However I do agree that she should have sorted her finances out long before now. Let this be a lesson to her!

So, she earns close to £2000 a month, doesnt pay rent and does not have the usual suspect outgoings...just what is she spending that much money every month on that she needs to borrow still more?

She wont get a loan for that amount because it is more than 50% of her income all told. The fact that she wants to consolidate is irrelevant to the lenders as they cannot be sure she will do so. In reality, consolidation never works as the consumer ends up owing twice as much as they started with and the lenders know this.

angie1979

Lol I don't think I have painted a very good picture of her. She live with her partner and he pays most of the bills, although she does pay for some. She pays about £350 a month travelling to and from work, car insurance, pet insurance bill and weekly food bills so that does add up to a bit. The leasing would be a good idea but she does more than 20000 miles in a year due to the distance where she works. But yes I am sure she could be making some savings!! Wish I didn't have a mortgage to pay, I would be minted lol.

Thank you for your comments.