Forum Home» Loans

In trouble with Debt - Now cannot get a loan

New Post Advanced Search

In trouble with Debt - Now cannot get a loan

edited 30 November -1 at 1:00AM in Loans
33 replies 3.8K views
ChocolateLabOwnerChocolateLabOwner Forumite
10 posts
edited 30 November -1 at 1:00AM in Loans
Hi, as the title suggests myself and my wife are in trouble with debt and I cannot get a loan to cover it, even though I have a good credit rating.


Im looking for some advice on where to go next, as the stress is now getting to me and is starting to effect my life, work and marriage, and I cannot let my family down.


I will start by saying I have had a god search around the site and read a lot of threads, but nothing has been very relevant to my situation.


Firstly, some background. I am 32 year old male, married and 2 kids. I have a house with a mortgage, and 3 bank loans in may name only, with my own bank. I am employed full time and receive a good monthly pay. I alone pay the mortgage, services bills and council tax. I use the Clear Score app to track my credit rating, which tells me I am 'soring high' and a good 60 points above my area average and the UK average.
My wife has multiple small loans in her name, a poor credit rating and has been poor with money control, prior to our marriage. She is not on the mortgage, and dose not contribute towards the household services bills, but does do the shopping.


We both have a car each, and the youngest is in nursery (with a monthly bill). other bills are the usual phones, internet etc.


Now, the problem.
Only one of my loans is for me. I took the other two out to cover my wife's debts. At the time this was not an issue and she paid me the monthly cost. But then Her father died and things got off track and out of hand. The outcome of this, a few months on, was that she became dependant on 'payday loan' companies instead of talking to me. This went on for a short while until it all came to light and we talked it through and sat down to make a spreadsheet of all the debts. After we had worked out a total of her debts and the 3 loans I have, I started looking at one loan to cover them all, to pay off my wife's payday companies and to consolidate my 3 bank loans into one loan to leave us with one easy payment split between the two of us. I have been looking for this loan in my name only, as I am under the impression (from my clear score app) that I have a very good credit rating and that will give me more opportunity or chance of being accepted.


Except I am not being accepted.


Now, I feel like I have worked all my numbers and figures out correctly, and the new loan total and monthly payments (split between the 2 of us) would be lower than what we are both paying currently. But I am still being rejected. I feel like our total debt is not high, even though its higher than I would want it to be, in comparison to some cases I have read about on this site.


Im Looking for what im doing wrong, or where I can turn to next. Thank you
«134

Replies

  • zx81zx81 Forumite
    28.9K posts
    Tenth Anniversary 10,000 Posts Photogenic Name Dropper
    ✭✭✭✭✭
    Your credit rating is made up. No one sees it but you as it has no meaning and doesn't reflect your credit worthiness.

    The reason you're being declined is that you have too much debt. You need to cut your costs and clear the debts.

    Visit the DFW boards for help.
  • I will have a look at the boards now thank you.

    I agree that i have debts, but this one loan would cost us less and be easier to pay, im not sure why that cannot been seen by a lender. For as complicated as money lending is, this seems to be a pretty obvious fix.

    And if a credit rating is made up, why is it so bloody important to everyone?!
  • zx81zx81 Forumite
    28.9K posts
    Tenth Anniversary 10,000 Posts Photogenic Name Dropper
    ✭✭✭✭✭
    Lenders have to assume that you won't pay off your existing debts and will end up owing twice as much, which is what many borrowers choose to do.

    Credit ratings aren't important to anyone. The financially illiterate tend to like them though. It's a hard problem to fix.
  • DCFC79DCFC79 Forumite
    39.1K posts
    Part of the Furniture 10,000 Posts Name Dropper
    ✭✭✭✭✭
    I will have a look at the boards now thank you.

    I agree that i have debts, but this one loan would cost us less and be easier to pay, im not sure why that cannot been seen by a lender. For as complicated as money lending is, this seems to be a pretty obvious fix.

    And if a credit rating is made up, why is it so bloody important to everyone?!

    So your wanting to consolidate, the problem is consolidating rarely works, in any casethe lenders have no no idea you will use the loan for the purpose you have in mind.

    As long as your history is correct then its all good.

    Theres 3 credit ref agencies lemders use, lenders can use just 1 or 2 or all 3 or even none at all but they would have to be daft to do that.
  • But when i apply and get to the 'purpose' section, i chose consolidation, to tell them what its going to be used for.

    And the consolidation is more of a house tidying operation for me, to make 12 outgoing payments into one.

    This would be the biggest loan id have, and my history should all be fine.
  • BoGoFBoGoF Forumite
    6.3K posts
    Part of the Furniture 1,000 Posts
    ✭✭✭✭
    But unfortunately for you no lender wants to take the risk that they will be the one that it all goes belly up. You have maxed out your borrowing options.

    Sorry, but in your situation you are not going to borrow your way of it. Your credit file essentially shows you need credit to get by.
  • zx81zx81 Forumite
    28.9K posts
    Tenth Anniversary 10,000 Posts Photogenic Name Dropper
    ✭✭✭✭✭
    Your history isn't fine because of the debt you're carrying.

    You need to target the highest rate debt and start bringing it down.
  • But i cant do that if were both spending all our money each month on multiple loans.

    I think what im trying to find is a way to explain all that to a lender, and make them see that the amount would still be the same, just easier to pay per month
  • BoGoFBoGoF Forumite
    6.3K posts
    Part of the Furniture 1,000 Posts
    ✭✭✭✭
    They have heard it all before though.

    What is your income? How much is the total debt?

    Is there any equity in your property?
  • zx81zx81 Forumite
    28.9K posts
    Tenth Anniversary 10,000 Posts Photogenic Name Dropper
    ✭✭✭✭✭
    That's why you can't get a loan. You're spending all your money each month, so you can't afford any more credit.

    You need to cut your costs and start paying off. This is where the DFW board will help.

    You can't borrow your way out of debt. It's like handing a drowning man a bucket of water.
Sign In or Register to comment.

Quick links

Essential Money | Who & Where are you? | Work & Benefits | Household and travel | Shopping & Freebies | About MSE | The MoneySavers Arms | Covid-19 & Coronavirus Support