Loans

Loans

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Should I apply for a loan myself or as a joint applicant?

Posts: 283 Forumite
Part of the Furniture 100 Posts Combo Breaker
My wife and I currently owe around £20k on outstanding loans and CCs...(I owe £11k whilst she owes £9k) we're both decent earners but would save a lot in monthly payments by consolidating into one loan over 5 years, so I'd like to apply.

Trouble is, I have an "excellent" credit score - 999 out of 999 with Experian, whilst my wife only has a "fair/good" rating. I'm wondering if it would be better to just submit a single application for myself rather than a joint?? Is there any benefit to a joint application (other than the fact that I'd be taking on her debt for 5 years - not a problem for me as it's really "our" debt and we've been happily married for over a decade).

If I did apply singularly, how would I justify it to the lender? as they will only ask how much I owe myself - which is much lower than the required loan amount....

any advice greatly appreciated

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Comments

  • Posts: 4,034 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    The problem for the lender is that they don't know you'll use the new loan to repay and then close off the old loan, so they'll see someone who already owes £11k wanting to increase that borrowing to £31k. I dunno what you class as being a "decent earner", but I'd image you'd have to be clearing at least £60k p/a individually to even think about it.

    Therefore, a joint application, given your joint income is likely to be more successful, notwithstanding your wife's average credit rating.
  • Posts: 2,988 Forumite
    Eighth Anniversary Combo Breaker
    What size of loan are you looking for? You do realise unless you're on mega money, you're unlikely to get a 20k loan whilst having 11k in debt on cards?


    Can you not shift your debt around to 0%? You could try heading over to the debt free board and post up your SoA to see if there's anywhere you can cut back to be able to increase your payments and get your debt down.


    The problem with consolidation loans is that people often get them, then continue to spend on the credit cards, and within a couple of years they've doubled the debt they initially consolidated. The best way to go is cut back, pay off the cards and close them down as they're paid off.
  • Posts: 2,988 Forumite
    Eighth Anniversary Combo Breaker
    ReadingTim wrote: »
    The problem for the lender is that they don't know you'll use the new loan to repay and then close off the old loan, so they'll see someone who already owes £11k wanting to increase that borrowing to £31k. I dunno what you class as being a "decent earner", but I'd image you'd have to be clearing at least £60k p/a individually to even think about it.

    Therefore, a joint application, given your joint income is likely to be more successful, notwithstanding your wife's average credit rating.


    If they have a joint income that surpasses 100K and they can't manage to pay down £20 of debt, something is seriously not right!
  • Posts: 283 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    lee111s wrote: »
    If they have a joint income that surpasses 100K and they can't manage to pay down £20 of debt, something is seriously not right!

    There's an awful lot of good advice and help on this site - and then there's nonsense like this.

    I didn't mention our joint income so this figure of £100k is irrelevant. Neither did I say that we couldn't manage to "clear down" the £20k debt - we are just looking to lower our monthly payments by consolidating it.
  • Posts: 2,988 Forumite
    Eighth Anniversary Combo Breaker
    Good luck securing your loan.
  • Posts: 283 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    All sorted - thanks for the replies all. Managed to get approval for myself as the sole applicant - has brought our monthly payments down by £114.
  • Posts: 4,047 Forumite
    1,000 Posts Combo Breaker
    horsepills wrote: »
    All sorted - thanks for the replies all. Managed to get approval for myself as the sole applicant - has brought our monthly payments down by £114.
    Now reduce your other credit limits.
    "Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."
  • Posts: 283 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Gaz83 wrote: »
    Now reduce your other credit limits.

    That's the plan....
  • Posts: 40,610 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Lenders don't see your credit score, what matters is your credit history.
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