Loan Declined - appealing

luckylas

Hello, I'm new here and looking for advice experiences etc. I'll try to keep it short.

I applied with sainsburys yesterday 10k over 5 years. I'm looking to consolidate the existing £400 I have with sainsburys, Very of 500 a car purchase of 7-7500 and the remaining on home improvements.

My credit score I'm not sure if relevant of 860. 2 searches carried out in 6 months one in March for a 5k loan which I did not proceed with it got accepted and I've recently switched bank accounts - another story Halifax made me believe that it wouldnt leave a huge mark on my file to which it has.

Sainsburys have said reasons for decline are the recent searches and my income level against my credit does not warrant a loan.

My partner pays the mortgage and utility bills my yearly income is £19500 and my total outstanding debt is £1800 - £460 of this is a joint overdraft in which I intend to take my name off. I also have a 360 overdraft which I fully use everymonth.

I dont understand when I dont have any big financial outgoings as to why they have said my income does not warrant the credit I currently have?

I have listed this in my appeal letter - would anyone know the chances of them changing their minds.

Lastly I am registered to all utilities at property however as mentioned my partner pays them, I see from my credit file all registered utilites, has this made them think my income does not cover my credit?

Could anyone shed some light?

Thank you

verityboo

luckylas wrote: »

.............

I applied with sainsburys yesterday 10k over 5 years. I'm looking to consolidate the existing £400 I have with sainsburys, Very of 500 a car purchase of 7-7500 and the remaining on home improvements.

...............my total outstanding debt is £1800 - £460 of this is a joint overdraft in which I intend to take my name off.

Those numbers don't make sense?

Do you already have a car loan and is that included in the £1800 total outstanding debt

They probably don't feel it is not affordable because it appears that if you had the loan and didn't use it to consolidate your outstanding debts (something which happens far too often!) then your borrowing would be too high compared to your current salary

luckylas

Sorry my debt is
£500 Catalougue
£360 overdraft
420 Sainsburys loan coming to end
£460 joint overdraft I'm taking my name off

No dont have car loan but I applied in march for one but changed my mind and didnt go ahead with it.

I'm trying to find out my chances in appealing based on the fact I didnt take on the loan in March.

And my more recent search was like for like bank account just more attractive deal, which only took place 2 weeks ago but as I said Halifax made me assume it would not leave such an impact on file. I have registered a complaint with them.

AndyPix

luckylas wrote: »

I also have a 360 overdraft which I fully use everymonth.

Well if your down to zero every month then they are probly concerned as to how you will afford to pay any further responsibilities

Westminster

Well using some very rough numbers, with a £19500 salary then your monthly net income is around £1,378.46

Then your debt as listed above adds up to £1740

There is no guarantee that you will use the new loan to clear your existing debt so most lenders are likely to assume you will spend the new loan entirely.

So that makes your total debt nearer to £11740 which is 60% of your income before any outgoings.

Its probably fair and reasonable to assume that Sainsbury's assessment of your affordability means you really can't (and shouldn't) afford this loan.

This is evidenced by you going fully into your overdraft every month - so they will ask the obvious question, where is the money coming from to service the new loan?

dresdendave

luckylas wrote: »

I also have a 360 overdraft which I fully use everymonth.

As pointed out by AndyPix, this is probably ringing alarm bells for the loan provider.


You are maxing out your OD while servicing a debt of under £2k, you now want to raise the debt to over £10k.


Exactly the type of scenario where people dig themselves even deeper in debt and then claim irresponsible lending by the bank.

SnowTiger

luckylas wrote: »

Sorry my debt is
£500 Catalougue
£360 overdraft
420 Sainsburys loan coming to end
£460 joint overdraft I'm taking my name off

No dont have car loan but I applied in march for one but changed my mind and didnt go ahead with it.

I'm trying to find out my chances in appealing based on the fact I didnt take on the loan in March.

And my more recent search was like for like bank account just more attractive deal, which only took place 2 weeks ago but as I said Halifax made me assume it would not leave such an impact on file. I have registered a complaint with them.

You can appeal the decision:

If you're unhappy with our decision, you can write to us at the address below. We'll provide you with an explanation as to how your application has been assessed. Underwriters (CLS Appeals)
3 City Park
The Droveway
Hove
East Sussex
BN3 7AU

If I was appealing the decision I would explain that I was 'shopping' around for a good loan deal and received two offers that I chose not to accept. I would also send copies of my credit reports to show the loans don't appear on them.

Lenders can access our credit reports, however they don't see all the details.

Your debts are quite small: only £1,380. But everyone month you run out of money and have to rely on a £360 overdraft. That alone would put me off lending to you.

System

luckylas wrote: »

I dont understand when I dont have any big financial outgoings as to why they have said my income does not warrant the credit I currently have?

Well if you don't have any big financial outgoings and your partner is paying the biggest bills then it could be asked why with an income of £19500 you have no money and a string of debt?

Your income quite clearly already doesn't cover your outgoings especially given you're living in your overdraft.

Would you lend money to someone who earns that much without a mortgage or utility bills to pay, has several finance agreements and is constantly in their overdraft and doesn't actually have a single penny to their name, because that is your financial position at the moment. No. And neither will the banks.

You don't need a loan, in fact that is the last thing you need. You need to pay off your existing debts and get your act together and save for a newer car and the home improvements instead of buying the largest digger JCB sells and digging yourself an even larger home.

Someone with your income and supposed lack of outgoings maximising your overdraft every month instead of having £1000s sat in the bank should be sounding alarm bells, massive ones with neon lights attached.

glosoli

Sainsbury's likely base their affordability on data from ONS, so whilst on paper you may have little outgoings, the reality is they are including averaged data for food shopping, utilities, travel etc. Also they are probably including every liability which appears on your credit report and their current payments, even if you intend to consolidate them. Also you mention that your partner pays the mortgage, are you still named on the mortgage? If so, they will be fully taking that into account as well. It is easy to see how your net monthly income whilst it looks affordable on paper, quickly gets gobbled up by what they include.

enthusiasticsaver

Regardless of your arrangement with your partner if you are named on utilities and mortgage then these are your financial responsibility too. On affordability they may well think that if you use your current credit availability up to the maximum (including overdraft) then a new loan would be unaffordable. It also begs the question of whether you really can afford a fairly substantial loan if you are going overdrawn each month on your current debt repayments alone. Have you done a spending diary to see where your money goes?

I do not think you will have any success in overturning a loan refusal.

DCFC79

No one on here can tell you of your chances are of appealing the decision but I have to say after reading your posts I cant see you being successful. You earn a decent amount yet you are in your overdraft.

A loan isn't what you need, you need to look at where your money is going, what are you spending it on other than the catalogue debt and the loan.