Advice needed..Top Up Loan

Harvs2

Hi All,

Thanks for reading and greatly appreciate any feedback you can provide.

I am coming up to paying 11 months of paying off my Tesco Loan loan (24 month) of approx £580 a month. I am looking to take up the top up loan offer they provide which I would like to extend the loan out longer than 24 months but ultimately pay a lower monthly fee (looking at about £300 if possible).

However I do have loan agreements out already, one with Barclays (who I have banked with for 9 years (remaining is approx £10000 remaining on a £460 monthly fee) and one with Hitachi Personal Finance (approx £9800 remaining paying £195 a month). I also have a Capital One credit card that was recently increased to £450 credit limit and an EE mobile phone contract. I recently took out a hire purchase agreement with Volkwagen paying £140 a month also.

My question is what are my chances of having this top up loan approved as it will allow me to have more of a disposable income after all the expenses are paid out? I understand this would keep me committed to the loan for longer but would Tesco be put off by having to lend me their minimum of £1000 so I could have my monthly payments reduced?

From checking my credit history, my last late payment dates back to June 2011 with all payments made to credit agreements on time. I have been in my current job since the beginning of 2014 and have lived at my address for almost 6 years.

Your help and advice would be much appreciated, many thanks.

[Deleted User]

No idea - you will need to ask them. But you seem to have a huge amounts of debt against your name, which is understandably going to make them very cautious.

Any way you can reduce your borrowing elsewhere?

Harvs2

Thanks for the reply, looking back at my recent searches i can see only one was made in november and then the other 3 in early 2015.

I can totally understand their caution but surely me having to pay less would make me less of a risk?

No other ways really as that would entail speaking to my lenders and then catching up on repayments.

CLAPTON

Harvs2 wrote: »

Thanks for the reply, looking back at my recent searches i can see only one was made in november and then the other 3 in early 2015.

I can totally understand their caution but surely me having to pay less would make me less of a risk?

No other ways really as that would entail speaking to my lenders and then catching up on repayments.

what do you earn
do your credit files show any late payments

Harvs2

earning about 1600 a month and there is only 1 late payment that shows from June 2011 but that account was only open 2 months.

Pixie5740

You're not paying less. You're borrowing more money and extending the term so whilst your monthly repayments might go down you will be repaying more capital and more interest.

As to whether Tesco will allow you to borrow we don't know, we are not privy to Tesco's lending criteria. Your high levels of existing debt will probably count against you though in terms of affordability.

Caz3121

Harvs2 wrote: »

earning about 1600 a month

if I have understood this correct you currently pay
580 Tesco
460 Barclays
195 Hitachi
140 HP
so £1,375 per month plus mobile phone and credit card
total debt more than your annual income?

Do you currently live at home with parents? (I suspect even the best budgeter could not manage rent and bills, travel to work etc on the c£200 month left over

There are many posts from people that lived beyond their means when they were younger and many many years later are still trying to get out the cycle of borrowing to pay debts and increasing debt each time.

This will likely be a time soon when mainstream lenders will lend no more and your options will be the very high interest lenders or rethinking your lifestyle...

bearcat16

You have way too much debt.

What have you got to show for your debt of £19,800? What has this money been spent on?

Not a car, as you have a VW on HP.

And now you want further borrowing...to fund what?

Sorry to be blunt, but you are heading for a serious financial crisis. You need to get your debt and spending habits / lifestyle under control without delay, otherwise you'll be facing bankruptcy within a few years or even months.

DCFC79

Harvs2 wrote: »

I can totally understand their caution but surely me having to pay less would make me less of a risk?

Is it £1000 or £10,000 you want to borrow ? Im guessing its £10k

The risk is you will splurge the loan on say a car, an expensive holiday, some clothes etc and end up with double the amount of debt you had before the new loan.

Id look at your spending and cut back.
Shop for food that's cheap eg ALdi/Lidl.
Various ways to save money, just look at the other threads on the debt free wannabe board.

ParaJon

If your current lending outgoings are in excess of 70% of your monthly income, you will probably be auto-declined on affordability.

Even if Tesco looked at your existing borrowing and referred your application which would then mean you will have to supply evidence of bank statements etc as well as your credit file. From the type of borrowing you have vs your income your status seems to indicate you are in financial difficulty and cannot budget. They will ask you what was the original loans for? Where did the money actually go? what do you need additional funds for? and they will search your bank statements for when your original loans hit your account, and then try and trace where it went.

When i used to authorise loans i would find it very difficult to find a good enough reason to authorise another loan ontop of such existing levels of borrowing.

THE LENDER may only look to refinance your existing debts if it makes it more affordable in the long term.

Flooky

Income £1600

Repayments
Tesco: £580
Barclays; £460
Hitachi: £195
Hire purchase: £140
Total: £1375

Remaining income: £225

and you are looking to extend a loan to allow you more disposable income? As stated before what you are doing isn't the right way to go about things. Why don't you talk to Tesco and try to agree a longer repayment period if you are struggling with the current terms.