Loan needed - better to use existing provider or new one?

Babbler

Hello all,

My loan ends next year (aug). Its with Sainsburys bank at 9.7%(!).

I have a need to consolidate all my credit cards / wife's / existing loan this month (£23k ).

Doing the eligibility calc it says I have a 63% chance for Sainsburys at 3.3%. However... as it says only 51% get that (I didnt get the top rate last time with them 4 years ago!).

TSB says 80% chance but representative 6.6%! So cost more (£35 a month more over 7 years).

I have an experian rating of 924 (good)...

Which would be better chance of lower rate in your opinions (appreciate its opinion only...).

Worried as Im on 9.7% now sainsburys would say thats the new rate as well... better to go with new provider (tsb)?

Thanks all...

[Deleted User]

You have £23k of debt and are looking for another 23k? Is that right? Or is the Sainsburys loan on top of that?

What's your income?

What are the rates of your current debts?

Babbler

No... I have 23k on my credit cards / loan / wifes cards I want to consolidate into one loan... so will have 23k overall once completed paying off...

StopIt

Babbler wrote: »

No... I have 23k on my credit cards / loan / wifes cards I want to consolidate into one loan... so will have 23k overall once completed paying off...

But for the purposes of a credit check, you'll be checked on whether you can afford £46k as there's no assurance you'll use the £23k to consolidate this debt.


Because of that, it will severely dent your chances of getting the rates quoted.


Why are you in debt? Have you addressed this, because getting a consolidation loan will not work if you continue the patterns that got you here and you'll be in danger of needing a £30k+ consolidation loan in a few years.


Get to the DFW boards, read the stickies and be prepared to make changes to your spending to get out of this debt cycle. I'd be avoiding consolidation loans altogether but that's your call.

[Deleted User]

That means you're asking for a total of 46k - you need to get the second 23k before you can pay off the first.

What's your income- 46k is a huge amount of unsecured debt that will scare most lenders.

PeacefulWaters

What have you done to address your overspending?

Babbler

My salary is £50k... we were overspending a while ago (not on frivilous things really -
just added up) but have now budgeted properly again... never missed payments etc... my loan was due to end aug. Current debt payments are £800 a month (between me and my wife) which is where the problem lies! If I bring this down to £340 (based on 6.9% for £24k) that would be a huge monthly saving... and we would NOT increase spending...

Babbler

Deleted_User wrote: »

That means you're asking for a total of 46k - you need to get the second 23k before you can pay off the first.

What's your income- 46k is a huge amount of unsecured debt that will scare most lenders.

Doesnt the eligibilty calc take that into account though - yes most said no but sainsburys and TSB said yes (probably as Im with sainsburys already?).

[Deleted User]

Babbler wrote: »

Current debt payments are £800 a month (between me and my wife) which is where the problem lies! If I bring this down to £340 (based on 6.9% for £24k) that would be a huge monthly saving... and we would NOT increase spending...

This is where you'll fall down again, even if you get a loan at that rate, which I doubt.

You shouldn't be aiming for a lower repayment, but to maintain payments, at a lower interest rate.

Babbler

Deleted_User wrote: »

This is where you'll fall down again, even if you get a loan at that rate, which I doubt.

You shouldn't be aiming for a lower repayment, but to maintain payments, at a lower interest rate.

I would if I could... but MRS may be out of a job soon which is £400 a month... hence need to consolidate and do 7 year loan...

In an IDEAL world I wouldnt.

DCFC79

You tried 1 of the lenders who offer a soft search option, Nationwide were 1, I dont like your chances though.