lloyds loan

Mr_Adds

I currently have a loan through Lloyds who i bank with for £22k, which i took out nearly 2 years ago now at 11.9%, currently owe £17900.

I thought of refinancing the loan through lloyds again to try and get a lower rate and pay off over a shorter period, applied online and was declined, even though the quoted payment was lower (circa £50, saving nearly £2k in interest over the term). I earn £31k so aware the income ratio is high, but they were happy to lend £22k only 18 months ago, albeit it at a high rate. Never missed a payment etc.

Only other debt is now joint mortgage, just finished paying my car off so this hasn't shown up on my credit file yet.

Has anyone any ideas why I was refused, or way forward?

Cheers

[Deleted User]

Affordability - you're asking for a total of around 36k.

Pay down the debt - once you get it a fair bit lower, you will stand a better chance. Also consider shifting smaller amounts to 0% cards if you can get them.

Mr_Adds

Sorry didnt make it clear- I want to borrow the minimum extra I have to, Lloyds say £1k minumum so will be borrowing £18.9k to clear existing loan, and then I intended to pay the extra £1k straight off the loan.

So existing Lloyds loan settlement £17.9, extra £1k you have to borrow, clear existing loan and pay the £1k into the new agreement.

-taff

See post #2. First sentence.

jonesMUFCforever

You could try one more application from outside the Lloyds bank stable - just to see what they will offer you.
If you don't get the loan at the rate you think you deserve then over pay the existing loan to reduce interest and term of the loan.

Money_maker

Lloyds will just see you doubling your debt. Who's to say that you will use the money to pay off your loan?

LMS94

Try Zopa, rates start from 2.9%

Mr_Adds

My existing loan is through Lloyds, and I applied for the new loan with Lloyds, so they would settle their own loan, and pay the 1K into my current account as the new one would have been through them so not borrowing 36k if that makes sense

Bermonia

It makes perfect sense... as they are consolidating their own debt they would do this automatica with the draw down of the new loan so would not be counted as ‘double’.

With regards to being declined... there are literally lots of reasons, can always try elsewhere but may no worth waiting a little while longer before trying again.

Gaz83

Why would it be in Lloyds' interest for you to save £2k in interest?

Craig1981

Mr_Adds wrote: »

My existing loan is through Lloyds, and I applied for the new loan with Lloyds, so they would settle their own loan, and pay the 1K into my current account as the new one would have been through them so not borrowing 36k if that makes sense

unfortunately this doesnt matter. you current loan payments are INCLUDED in your affordability score for this new application - so can you afford to pay both - no? then declined application.

regardless of refinancing your current loan or not, what zx81 has originally said is correct. your application will be for affordability on new loan as well as old loan - all providers will do this

you could try places like rate setter, Zopa, Nationwide affordability checks, which wont leave hard searches on your file