Loan declined

hazelbl

foxy-stoat wrote: »

If your paying over £1300 a month on credit card debt you should be able to minimum pay the all but the highest interest card and clear it and work your way down. Any chance of balance transferring to reduce the interest overall?

Is your monthly car repayments £606, both cars on PCP?

Find out half way repayment mark and look to get out of these deals - over £7K a year just to rent a couple of cars isnt very cost effective.

One car is PCP the other we are in the process of swapping, it will be another HP finance deal but for the same monthly payment but the running costs of the other car are significantly different e.g. going from group 13 insurance to group 2, the new one does have road tax and does more MPG so will be a saving there. We are over the halfway mark on both cars - hence swapping the HP one but the PCP one halfway doesn't make any difference and the cost is well in to several thousand so sadly we are tied in there - lesson learned the hard way sadly!


Sadly can't balance transfer as don't have any free space on credit cards and can't open any new ones. We are minimum paying (well over by £1 so we don't fall foul of the new law re minimum payments) and then overpaying on the highest interest card.

foxy-stoat

If you are over half way then is it not an option to revert back to cars that are more affordable, say £2000 each? I ran a car thats £4000 and its perfectly adequate for 15K miles a year and affordable. If you both want new/nearly new cars and cannot drive older ones then far enough.

Have you done the PPI refund thing yet?

CKhalvashi

foxy-stoat wrote: »

If you are over half way then is it not an option to revert back to cars that are more affordable, say £2000 each? I ran a car thats £4000 and its perfectly adequate for 15K miles a year and affordable. If you both want new/nearly new cars and cannot drive older ones then far enough.

Have you done the PPI refund thing yet?

This,

My mother managed 29000 miles MoT to MoT in a ‘13’ plate Chevrolet Spark (basically a rebadged Vauxhall Corsa). The fuel bills are tiny (with a mileage rate being paid by her employer for some of it) and it is comfortable enough to spend 20 hours a week in. She paid £3000 for it from a dealer. Put into perspective, that is a year of car payments and the car is yours at the end of it, so effectively ‘free’ from there.

There’s no reason why even a sub-£1k car won’t do the job perfectly and it may be worth looking at Bangernomics thread. Rovers and older Fords are common as parts are cheap and easy if it does go wrong.

PPI is also important to look at if you’ve had it. Remember not to go through a claims company though,

forgotmyname

hazelbl wrote: »

One car is PCP the other we are in the process of swapping, it will be another HP finance deal but for the same monthly payment but the running costs of the other car are significantly different e.g. going from group 13 insurance to group 2, the new one does have road tax and does more MPG so will be a saving there. We are over the halfway mark on both cars - hence swapping the HP one but the PCP one halfway doesn't make any difference and the cost is well in to several thousand so sadly we are tied in there - lesson learned the hard way sadly!

Just because a car is group 2 instead of 13 does not mean its going to be cheaper.

The payment will be the same when you take out the new HP deal. Thats not helping you lower the debts.

You say cheaper insurance and better mpg and lower tax. But you forget the main cost which will be depreciation. You get the deal and lose another £3k instantly???

£450 groceries? We use ASDA and Sainsbury's and dont spend anywhere near that on 3 adults.

Muscle750

I just cant understand how £40k plus balances on credit cards was ever made avalible to you in the first place and what have you got to show for it .

foxy-stoat

Muscle750 wrote: »

I just cant understand how £40k plus balances on credit cards was ever made avalible to you in the first place and what have you got to show for it .

You dont need to understand it, its just the system of credit and credit cards and introductory 0%/low interest deals/low minimum payments and the never ending repayment cycle.

Take a loan for £7500 over 36 months and your done in 3 years, if you can afford the repayments.

Take a credit card out with a limit of £7500 with interest in double figures with a repayment strategy of interest plus a percentage of the balance and if the poor sap only makes the minimum payments then the balance will take years to pay off as the minimum payment is based on a percentage so will always reduce, so the end date is always moving - providing you dont spend on it.

What they should be doing is making the calculation based on clearing the debt in 36 months so the minimum payment will be fixed or go up if you spend.

Smellyonion

The weighted APR average of your debts is 18%.


Any consolidation loan below this rate will save you money, providing that you maintain your current level of repayments (1.4k pm).

foxy-stoat

Smellyonion wrote: »

The weighted APR average of your debts is 18%.


Any consolidation loan below this rate will save you money, providing that you maintain your current level of repayments (1.4k pm).

I dont think a consolidation loan is going to be much good for them - they have already had 2 declines.

enthusiasticsaver

As others have said a consolidation loan wont be available to you on affordability grounds and is not a sustainable way to clear debts anyway. You seem to have reached a crisis point with over £60k of unsecured debt and an unavailability of good deals to transfer the debts over as the deals expire. You have two options really. Either you continue to cost cut as far as possible and tackle the unsecured debts by the most expensive first or you enter some kind of debt management plan. Bankruptcy is out because of your house and your cars although there is no equity in the property left the OR would definitely tell you the cars must go. I think if I were you I would take the option of cutting costs and overpaying the most expensive as much as possible and see where you are in 6 months time. You do need an emergency fund so I would direct the £50 holiday money to that. You cannot afford holidays.

foxy-stoat

enthusiasticsaver wrote: »

As others have said a consolidation loan wont be available to you

The system works, this type of loan wont help you clear your debt, you would of probably ended up defaulting and going further down the debt spiral - responsible lending right there people ( or responsible decline in lending ).

Folk are always quick to jump on the band wagon for mis-selling a high interest loan....the decline is a blessing and a wake up call.