Over £150,000 equity but can’t get a loan because of bad credit

Richard987

I had a workplace accident a few years ago which meant I couldn’t work for a couple of years. We had a 12 month arrangement with our mortgage lender for reduced payments, we also entered into arrangements with a credit card and loan company for a freeze on the accounts and a fixed monthly payment.

Clearly this all had a detrimental affect on our credit score. Although now working again and back to full health I have struggled since the accident to make ends meet and I am still in debt.

I have £180,000 equity in my house but I cannot get a loan to consolidate my debts because of my bad credit score! I think my only option is a secured loan, but I just think it’s ridiculous that I can’t use my own asset to get myself back on my feet and start with a clean slate.

Any advice gratefully received.
Many thanks,
Richard

[Deleted User]

It's not your score, but your history that is holding you back.

Consolidation isn't the answer. Visit the DFW board for advice on cutting costs and paying back faster

dresdendave

Richard987 wrote: »

I have £180,000 equity in my house but I cannot get a loan to consolidate my debts because of my bad credit score! I think my only option is a secured loan, but I just think it’s ridiculous that I can’t use my own asset to get myself back on my feet and start with a clean slate.

Any advice gratefully received.
Many thanks,
Richard

The equity in your house is basically irrelevant unless you go for a loan secured against it.

This would then mean that your home is at risk should you have problems with repayments.

If you really want to "use my asset to get myself back on my feet and start with a clean slate" then you would sell your house, buy a cheaper one and use the surplus money to pay off your debts. Is that an option? Your current plan will not leave you with a clean slate, merely a different slate to your current one.


As per previous post, consolidation rarely works, far better to slash spending and/or increase income and snowball the debts.

Visit the DFW board for friendly advice.

Remember you don't deal with debt by borrowing money elsewhere.

BrassicWoman

equity doesn't service a loan, income does. So it's largely irrelevant; it's only useful when released.

sourcrates

Blessing in disguise for you, not been able to consolidate, twelve months from now you could of been back on here facing repossession most likely.

It is debt management advice you need, not loan advice, as advised, pop over to DFW, post your SOA, (statement of affairs) and we will take it from there.

meer53

Richard987 wrote: »

I had a workplace accident a few years ago which meant I couldn’t work for a couple of years. We had a 12 month arrangement with our mortgage lender for reduced payments, we also entered into arrangements with a credit card and loan company for a freeze on the accounts and a fixed monthly payment.

Clearly this all had a detrimental affect on our credit score. Although now working again and back to full health I have struggled since the accident to make ends meet and I am still in debt.

I have £180,000 equity in my house but I cannot get a loan to consolidate my debts because of my bad credit score! I think my only option is a secured loan, but I just think it’s ridiculous that I can’t use my own asset to get myself back on my feet and start with a clean slate.

Any advice gratefully received.
Many thanks,
Richard

Getting a secured loan IS using your asset to get back on your feet. How else did you think you could use your asset ?

jonesMUFCforever

Depending on where you live have you considered selling and buying somewhere cheaper?

enthusiasticsaver

As others have said consolidating is not the answer. Imagine getting a secured loan on your property and then having problems in meeting mortgage payments further down the line. If the mortgage company are not so obliging as to agree to reduced payments you would be putting your home at risk of repossession.

Income is the thing you need to look at and expenditure when it comes to getting out of debt. Increase the first as much as possible and cut the second.

dealer_wins

OP wont be back, didnt like what he read lol

Xbigman

dealer_wins wrote: »

OP wont be back, didnt like what he read lol

Whats funny about it?



Darren

ReadingTim

Xbigman wrote: »

Whats funny about it?

The frequency with which people claim "any advice gratefully received", then go off in a sulk when the advice they receive is not the "advice" they wanted to read...