Cant consolidate with credit history

jon1967

Hi. I have numerous debts from historical circumstances and struggling with repayments, however If I could consolidate I could easily afford the repayments and over a shorter term. Problem is I am being refused everywhere due to credit history. Rock and a hard place so to speak.

Dobbibill

Hi Jon - welcome to the forum.

You've not given a great amount of detail in your post.

Consolidation rarely works. It would help us to provide tailored suggestions if you could give us more detail like your income, the debts and APRs. Min payments, remaining terms and how your figures are calculated for consolidation.

DCFC79

I agree with previous advice.

Lenders see the new loan as extra debt, they have no idea what you plan to do with it, as far as they are concerned your going to have a splurge and you will at some point end up defaulting.

2 options of sorting it, 1 is to up your income whether a second job or sell stuff or 2 you reduce your spending so get rid of Sky/Virgin, lose the costly phone contract and sell the phone and get a cheaper option. Shop at cheaper places eg Aldi and or Lidl, other shops you can use eg Home Bargains or B&M just as long as you know where the cheaper price for item x is availanle from.

jon1967

Thank you for the reply.

This is my quandary, I have done the sums and a consolidation would work.


Total capital to settle all debt £24780
Current monthly repayments £1960
Consolidation loan amount £25000
Budgeted monthly repayment £1000 over 3 years
Annual income £57000
Debt free in 3 years and without paying all the extra interest on existing debt or, struggling to meet monthly demands.

Dobbibill

You don't say what the APRs on the debt currently is. Your calculations are probably based on the better loan rates which you are unlikely to get with your history. Not being able to consolidate is probably a blessing in disguise - I know - you don't agree with me right now.

The good news is with a decent income, you may be able to work on a budget to pay off the debt.
Have a read of this thread https://forums.moneysavingexpert.com/discussion/5567669/unsure-whether-to-consolidate-please-advise and you'll see how it's possible to take on board the advice not to consolidate and still work it out. It won't be easy and will require discipline and determination.
Fill out a SOA http://www.stoozing.com/calculator/soa.php and head over to the DFW board https://forums.moneysavingexpert.com/forumdisplay.php?f=76 . Be honest with your SOA and they can give you tailored suggestions of where you can save money to throw at your debt.
I wish you all the best but consolidation really isn't the answer

jon1967

Thank you Bill, I will certainly do that. Total capital to be repaid on existing debt is £37k, so even allowing for a high interest rate on consolidation I still shorten the term, cut my repayments almost in half and pay back a little less...

enthusiasticsaver

Lenders don't know you will use any new loan application to repay existing debt so they view you as borrowing an extra £25000 on top of the £25000 debt you already have. Regardless of whether you think consolidation will help you it rarely does. Most people who get into debt consolidate then continue with the same spending habits so they then have the loan plus further new debt on cards which of course makes things worse.

You have a reasonable income but without an soa which is a statement of account it is difficult to see where your income goes. On £25000 monthly repayments of almost £2000 seems high so I am guessing your interest rates are high. I would suggest you focus on Repaying the most expensive by cutting down as far as possible. Alternatively you could explore a DMP by phoning stepchange. Can you put an soa up? There is a link in the sticky at the top of the DFW board.

enthusiasticsaver

jon1967 wrote: »

Thank you Bill, I will certainly do that. Total capital to be repaid on existing debt is £37k, so even allowing for a high interest rate on consolidation I still shorten the term, cut my repayments almost in half and pay back a little less...

Regardless of whether you think consolidation will help or not you will not get a loan in your present circumstances at a reasonable rate if at all. Focus on repaying the debt not moving it which is all consolidation does.

DCFC79

jon1967 wrote: »

Thank you Bill, I will certainly do that. Total capital to be repaid on existing debt is £37k, so even allowing for a high interest rate on consolidation I still shorten the term, cut my repayments almost in half and pay back a little less...

Its not going to work.

You need to go over dfw board and post up an soa.
Either do option 1 or 2 I posted earlier.