Loan advice please

festivalabbie

Hi, can anyone give me some advice on how to get out of a situation we're in?

We are home owners with a mortgage. We have started having an extension built and are about half way through. We both work full time and have a joint income of about £65K each year (before tax)


We were relying on an addiitonal loan against our mortgage to pay for the rest of the building work but have just found out that we have been refused this additional loan due to a poor credit rating of my partner (who is the main breadwinner)

We now need to borrow £30K ASAP to pay for the rest of the extension but don't know where to turn to. We have no rich relatives!!

How can we borrow this sort of money with a bad credit rating? I only earn about £12K PA so don't think I can borrow that against my name alone.

Any advice would be much appreciated!

Thanks

foxy-stoat

Loan, credit cards, thats it really - down value the car(s) - do you have a monthly budget?

Doubt you will be able to get the whole lot on interest/low interest rates so how much is your realistic budget for credit repayments?

If you cannot afford to repay loans and credit card balance of £30K the other option is to stop work and re-assess your financial situation.

festivalabbie

Thanks. We're desperately trying to avoid stopping the works as that will have a real knock-on effect to the builders, and we're at a point where if we just stop now we'll be left with a dangerous building site for however long!

We can afford to pay an extra £500-£600 a month on any loan we take out, but as my partner has a poor credit score we're so limited on what loans we can take out.

We have 1 car which is worth about £3K and we need it so can't get rid of it / get a cheaper one.

[Deleted User]

festivalabbie wrote: »

We can afford to pay an extra £500-£600 a month on any loan we take out, but as my partner has a poor credit score we're so limited on what loans we can take out.

Credit scores don't exist. Do you mean he has a poor credit history?

What exactly appears on his files? CCJs? Bankruptcy? Poor repayment history? Too much debt?

festivalabbie

Sorry, bad terminology!

He had a few late repayments on a credit card which has given him poor credit history. he didn't miss payments but they were late a few times. Anything we can do about that, or do we just have to accept his credit history?

[Deleted User]

If the markers are correct, there is nothing you can do about.

If that card doesn't report to one of the CRAs, you could put some effort into seeing if there is a lender who might not see the late payments, but most large lenders use more than one.

DCFC79

festivalabbie wrote: »

Sorry, bad terminology!

He had a few late repayments on a credit card which has given him poor credit history. he didn't miss payments but they were late a few times. Anything we can do about that, or do we just have to accept his credit history?

Why did he miss them ?
Im guessing a DD wasn't setup hence why they were missed.

foxy-stoat

festivalabbie wrote: »

Thanks. We're desperately trying to avoid stopping the works as that will have a real knock-on effect to the builders, and we're at a point where if we just stop now we'll be left with a dangerous building site for however long!

We can afford to pay an extra £500-£600 a month on any loan we take out, but as my partner has a poor credit score we're so limited on what loans we can take out.

We have 1 car which is worth about £3K and we need it so can't get rid of it / get a cheaper one.

You probably want to stop the building works so you are left with a non dangerous weather proof building and carry on with more funds.

If you have £600 maximum a month that will not get you £30K at the lowest rate on the market - if you have recent missed payments then you will unlikely get the lowest rate.

To give you some pointers -
£10K loan at 3% over 5 years is £180 a month
£10K on 0% balance transfer intro interest card (say HSBC) minimum monthly payment will be £250
£10K on 0% balance transfer intro interest card (say Barclay Card) minimum monthly payment will be £225

But you would need another card with at least £10K limit in order to pay for the work, assuming the builder takes credit card payments. You would also need to get additional credit cards to do the balance transfer after the intro rate runs out or you will be paying 20% interest on £10K in a couple of years assuming you dont spend on the cards.

So to finance the rest of the works you need to have a total limit of £33K over 3 cards + £10K loan....which is very unlikely based on the information you have given.

Find out how much you can get on credit then adjust the works accordingly.

MEM62

Ouch! Such are the risks of embarking on a building project without the funding in place.

As you are between a rock and a hard place I would look for the largest bank loan that you can secure (maybe approach your own bank) and use this money to negotiate with the builder to get the project to a point where the building is safe and weather-tight. From that point on you could have the work done in stages as you manage to save the money.