Loan declined

hazelbl

Hi
Desperately need to consolidate loans as being crippled by interest, both me and hubby. Went online to do a soft search with the banks we each bank with. Both said we were likely to be accepted but when we applied my husband was turned down. I now daren't do mine as my credit score is much worse than his and I don't want to affect it even more by applying.

Why do they say you are likely to be accepted (there are other rankings such as less likely or not at all) ask for minimum info e.g. his only asked for mortgage payment and monthly income and then say no?

Any ideas as to what to do next?

Thanks
Hazel

Willing2Learn

Hi Hazel,

It might be a good thing you were not accepted. Consolidating loans do not often succeed in reducing debt, in fact it usually has the opposite effect, with the debtor just doubling their debt, without addressing the fundamental budgeting problems that exist. Have a read of peoples stories of their experiences with debt consolidation in the thread below::https://forums.moneysavingexpert.com/discussion/5567669/unsure-whether-to-consolidate-please-advise


It would be useful for you to do a Statement of Affairs (SOA). Then we can all see your exact circumstances and advise accordingly.

Just complete the form, click on the 'format for MSE' button at the bottom of the form, then post it up here.

http://www.stoozing.com/calculator/soa.php

DCFC79

hazelbl wrote: »

Hi
Desperately need to consolidate loans as being crippled by interest, both me and hubby. Went online to do a soft search with the banks we each bank with. Both said we were likely to be accepted but when we applied my husband was turned down. I now daren't do mine as my credit score is much worse than his and I don't want to affect it even more by applying.

Why do they say you are likely to be accepted (there are other rankings such as less likely or not at all) ask for minimum info e.g. his only asked for mortgage payment and monthly income and then say no?

Any ideas as to what to do next?

Thanks
Hazel

Your credit score isn't seen by lenders, lenders will see your credit history.


It also depends whats on your credit history and the amount your wanting to consolidate compared to your incomes.
Lenders see the new loan as extra debt and so will either offer a high apr or just wont lend to you. as far as the banks are concerned you could go and splurge the loan on holidays, a new car.


I see 2 options here, either you look at your spending and reduce it so you can off the debts or you find a way to increase your income.

-taff

Go to the debt free wannabe board and post up an SOA so people can help you

Dobbibill

I agree with other the DFW board is where you need to be - post up an honest SOA. You will then get tailored responses.

hazelbl

Thanks everyone I have done a spending review and have ditched everything that we can the rest we are tied in to e.g. car on PCP which has negative equity unless we keep for the duration. We have two cars but can't reduce that as hubby can't access his work at the time he needs to with public transport and I have to use one for work. We are about to change the second car for one with much cheaper insurance, petrol and no road tax so that will all help.

I will do a SOA though and see if there is any other ideas people have. I hadn't seen that I have used the budgeting tool through the citizens advice which is what I have used to get to this point. It is the interest on the debt that is the problem and we used our equity in the house a few years ago so can't do that as there isn't any left.

thanks everyone.

hazelbl

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 2799
Partners monthly income after tax....... 1900
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 4699

Monthly Expense Details
Mortgage................................ 565.2
Secured/HP loan repayments.............. 606.8
Rent.................................... 0
Management charge (leasehold property).. 24
Council tax............................. 132
Electricity............................. 104
Gas..................................... 0
Oil..................................... 0
Water rates............................. 47.63
Telephone (land line)................... 33
Mobile phone............................ 30
TV Licence.............................. 12.83
Satellite/Cable TV...................... 3.99
Internet Services....................... 0
Groceries etc. ......................... 450
Clothing................................ 25
Petrol/diesel........................... 160
Road tax................................ 35
Car Insurance........................... 91.8
Car maintenance (including MOT)......... 40
Car parking............................. 38
Other travel............................ 0
Childcare/nursery....................... 364
Other child related expenses............ 34
Medical (prescriptions, dentist etc).... 34
Pet insurance/vet bills................. 32
Buildings insurance..................... 24
Contents insurance...................... 9.72
Life assurance ......................... 42
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 20
Entertainment........................... 11
Holiday................................. 50
Emergency fund.......................... 0
Total monthly expenses.................. 3049.97


Assets
Cash.................................... 0
House value (Gross)..................... 158000
Shares and bonds........................ 0
Car(s).................................. 14650
Other assets............................ 0
Total Assets............................ 172650


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 128000...(565.2)....2.6
Secured Debt.................. 23749....(109.9)....2.6
Hire Purchase (HP) debt ...... 21170.1..(496.9)....6.9
Total secured & HP debts...... 172919.1..-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard freedom............11467.4...258.4.....18
Santander......................3989.7....52........15
barclaycard cashback...........10879.5...378.7.....20
Halifax........................6609.54...99.4......5
Barclaycard Plat Visa..........10106.1...232.......17
NUBA...........................3964......41.2......0
MBNA...........................13177.3...334.6.....30

Pixie5740

What did you use the equity in your house for a few years ago, debt consolidation? How did that work out for you?

According to your SOA you should have £252.73 left each month. Where is that money going?

There's scope to reduce your grocery spending but it's really the cars that are the problem. You say you're changing the second car, how are you planning on finding that?

zippygeorgeandben

Yes consolidation is not the answer here. It just extends the amount of years you are in debt for.
People will be along to offer advice soon I am sure.
Spending £25 a month on clothes must mean you have quite a few clothes purchased over the year so is this necessary?

hazelbl

zippygeorgeandben wrote: »

Yes consolidation is not the answer here. It just extends the amount of years you are in debt for.
People will be along to offer advice soon I am sure.
Spending £25 a month on clothes must mean you have quite a few clothes purchased over the year so is this necessary?

The 25 is between me, hubby and our son and to be honest moat of that is spent on our son, shoes etc I haven't bought clothes in a while and if I've needed some it's eBay so I'm not spending unless I had to.

For the other post the extra money is going towards our highest interest credit card I over pay the monthly instalments by £200.

The car is a straight swap for finance so will be swapping one hp for another there isn't any difference in car value just type of car so we aren't paying tax and less insurance.

Thanks everyone.

hazelbl

Pixie5740 wrote: »

What did you use the equity in your house for a few years ago, debt consolidation? How did that work out for you?

According to your SOA you should have £252.73 left each month. Where is that money going?

There's scope to reduce your grocery spending but it's really the cars that are the problem. You say you're changing the second car, how are you planning on finding that?

The grocery we are trying a reduced budget and have swapped to Aldi, the house equity was for a big issue we had with the house so not consolidation just an old house.