Excellent Credit Rating, no loan - help!

[Deleted User]

Thanks for reading...

I have a credit rating of 977 but cannot get a loan as I am using a high % of available credit.

I am trying to get the loan to consolidate credit cards, pay off other debts and am looking for about £18k. I am meeting every payment which amounts to about £700 per month, and a loan would cost me £200-£300pm.

The bank says they can't give me a loan because of affordability but I will be much better off having the loan and using less available credit! Though I understand the banks being cautious, how on earth can I get around that! I am good for the payments and will have more disposable income to live off.

So easy getting in to debt, so difficult to get out! Help please

Caz3121

Although you say you are looking to consolidate existing debt there is no guarantee from the banks perspective that you will not take the £18k and go off on a round the world cruise leaving you owing your existing £18k plus the new £18k so will assess you as having a total debt of £36k

Rule of thumb tends to be debt to income ratio being around 50% so, if your salary is £40k and you already have £18k you may be able to take on another £2k debt

If your existing debt (loans/cards?) are with your own bank you may do a little better as you can get them to pay off the existing debt from the loan and close the accounts

Foxy-Stoat_3

Your credit score has not bearing on loan acceptance.

I am afraid that you cannot borrow your way out of debt £18K worth of debt.

Tixy

Is a good chunk of the existing debt with any one particular lender, e.g. your own bank?
If so they may be more likely to be able to lend to you - given that they will be able to force repayment of their own debts with the funds, and so the overall maximum indebtedness will be lower than if from a new lender.

An alternative might be to look at refinancing just the most expensive of your current debts, if some of it is particularly high interest.

[Deleted User]

Thanks Caz,

What if I gave the banks the list of cards and payment details so they knew that the money was going off consolidation. Or I even have someone willing to be a guarantor..

It's just frustrating that I've come so far already paying loads off and I feel like I have hit a brick wall!

I want to carry on clearing it.. debt free will be amazing!

CHR15

You need 978 to be accepted.

getting an 18k loan is hardly debt free.

Tixy

[Deleted User] wrote:

What if I gave the banks the list of cards and payment details so they knew that the money was going off consolidation. Or I even have someone willing to be a guarantor..

The problem is they cannot force you to repay those debts, so they look at the worse case scenario in terms of affordability.

Guarantor loans are not the way to go, they typically have an APR of around 50%.

Are you struggling to afford the £700 a month? Are you existing debts on quite high APRs?
Have you tried looking at a 'snowball' calculator to see how long it will take to clear off your existing debts? Presumably the loans you were looking at were over around 7-8 years given the £200-300 figure you quoted?

[Deleted User]

I don't disagree Foxy-Stoat, but I am now paying higher interest on a credit card that I want to move to a loan and would prefer it in one payment!

Foxy-Stoat_3

[Deleted User] wrote:

Thanks Caz,

What if I gave the banks the list of cards and payment details so they knew that the money was going off consolidation. Or I even have someone willing to be a guarantor..

It's just frustrating that I've come so far already paying loads off and I feel like I have hit a brick wall!

I want to carry on clearing it.. debt free will be amazing!

This would only work if the bank actually pays the money to the other companies, generally if you get an unsecured loan then they credit your account.

If you do manage to get a consolidation loan then do cancel all the credit cards once cleared and try and work out how you got into that much debt in the first place.

Whats your salary out of interest, as you will find it hard to get approved for an £18K debt consolitdation loan.

[Deleted User]

I've already worked that part out which is how I am now in control of it all.. the credit cards are already cut up and unused and I am now a cash only user!

I'm self employed which doesn't help but have the evidence to prove my income to the bank!

[Deleted User]

I clear well over £1k per month, sometimes £2k