Extending the loan period

RoxyMontana

Hi guys. I have a £15k loan I took a year ago over 5 yrs and am looking to get the payments down. The current settlement figure is £12k. I did a soft search on here and got quoted an 80% likelihood of acceptance for a loan but the application got declined. I don't want a flurry of applications on my credit record. I'm just looking to borrow the settlement fee at a better rate and pay off the original loan but of course it looks like additional borrowing. Can anyone suggest next steps? 

[Deleted User]

If you can't borrow with your current circumstances, then you either need to warn more or reduce the amount you need to borrow.

What is the rate on your current loan?

RoxyMontana

Hi thanks. Long story short, I can't earn more. 

Current rate is 10 %

[Deleted User]

Then you need to overpay as much as possible to get the balance down to a level where you may be able to refinance it.

Bear in mind that if you are offered a loan at 10% only a year ago, your chances of now getting a lower rate are far from guaranteed, with your added debt and tighter lending.

RoxyMontana

Thanks but if I could afford to overpay it I wouldn't have a problem

[Deleted User]

Then all you can do is continue to pay it at the contractual rate.

RoxyMontana

Okay thanks

macman

It doesn't look like additional borrowing: it is additional borrowing. The new potential lender has no way of knowing that you will use the money to pay off the existing loan.

RoxyMontana

I understand, I thought that might have been understood as I selected debt consolidation as the reason. I'm really looking to extend the duration of the loan to reduce the payments. 

foxy-stoat

I dont think you will be able to get another loan at a cheaper rate, you may end up with a higher rate of interest as its for debt consolidation.  The lenders have no way of 100% guarantee that you will use the money to clear your existing debt, folk have ended up in twice the debt and gone pop.

Your better off selling whatever you spend the £15,000 on last year and use the money to pay off your current loan to reduce the payments.

RoxyMontana

Thank you. I used it for home improvements as it was affordable at the time. Only option would be to move but hoping to avoid that.