finding it hard to get a personal loan ....

teeny1

Hi there

I was just wondering if anybody could give me some advice. My husband and I own our house, our mortgage is very low and we have never missed a payment. We have both NEVER had a credit card, store card ... we would like to borrow approx £20,000 to make some home improvements so are looking into the most reasonable and affordable way to do this.
At first we looked into extending our existing mortgage but the repayments back worked out very expensive. So we have decided that we would like to take out a non-secured personal loan over a shorter timescale (ie 7/8 years) ..
I made an application in my own name with yourpersonalloan.co.uk (they advertise that they only charge 6.3% apr) but was refused ... it seems because I have never used credit/store cards, had any previous loans, dont go overdrawn with bank I have no credit history (our mortgage is in my husband's name).
Can anybody give me advice on the best way to get a reasonable loan? I dont want my husband to have to take it out in his name I'd like to make a joint application .... thank you so much for reading this. I find the whole applications process with these companies so annoying! If any body has any advice I'd be delighted

kitchen_buff

Be careful not to apply for too many loans, as this shows up on your credit file, once you apply for so many you will automatically get refused. Lombard seem quite good. Maybe try remortgage with the one account, bit more APR but you can pay off quicker with no penalty.

CLAPTON

I would reconsider extending your mortgage... why do you say its very expensive... what is the APR of the mortgage? Its unlikely you will get anything cheaper than your mortgage rate.

To get a 20k unsecured loan you need a good income and a very good credit record.
What is your income
If your creit record has little on it them a potential lender can't know whether you will be good payers.
After your mortage lender I would suggest trying your bank who will already have knowledge of how you keep your accounts.

teeny1

Thanks so much for your advise. My husband & i have been discussing extending the mortgage and it seems like a lot of money to be paying back over 20 years but is is more reasonable in the long run as the repayments are low and our mortgage right now is very low compared to all our friends ... so yes think thats the best idea for us thanks a million!This forum is fantastic for people like me who dont have a clue about finances its very kind of you to reply back. all the best

CLAPTON

Most mortgages allow overpayments so if in due course you find you have spare money you can start to overpay the mortgage and so shorten the period and hence the overall interest.

Carter_2

You dont have to take the additional borrowing over the remaining term of the mortgage but you can take it over a shorter term (thats if I have read your post correctly and was the reason why you didnt want to add it to your mortgage). That way it will cost you less as you are paying less interest back. However, before you decide on which way to go about it I would have a word with your bank/building society.