Trying to consolidate 3 loans

Paula1981

Hi, I currently have 3 loans, business loan with about £5,000 left at 6% (business is now closed) a personal loan with around £6,000 left at 3% & the last one is £2,000 at 26%

I have tried to apply for a larger loan, hoping to get the 3% interest rate but no luck. Is there a way to get the 3% rate or another way to lower the monthly payments? Thanks

[Deleted User]

You won't get a good rate with that level of existing debt and rates. 

Head to the DFW boards for advice on cutting costs and repaying faster.

[Deleted User]

As you'll find out on any of the numerous posts about consolidation, lenders always consider your debt as existing PLUS new, not existing being paid off by new as there is no guarantee that you will use the loan to pay off the old as they cannot force you to do this - you might have a hot tip about Lame Laddie in the 4:50 at Chepstow for example and now you have both debts to repay. Hence affordability is done on whether you can manage £26k of debt and presumably you can't so they reject you. It's also unlikely you will get a 3% anyway given your current debt, the representative rate is only given to 51% of successful applicants and the bank is free to reject you for that and give you one they consider better represents the risk to them.

As above, you should look at cost cutting and repayments say via snowballing 

Paula1981

thank you. My biggest out lay is food shopping at £350-£400 a month for 4 of us. Thats without any luxuries

[Deleted User]

Do a full SoA on the debt free boards. It's not usually the biggest outlays you need to look at (although that food budget could be trimmed a bit, even in today's market).

sourcrates

Paula1981 said:

I have tried to apply for a larger loan, hoping to get the 3% interest rate but no luck. Is there a way to get the 3% rate or another way to lower the monthly payments? Thanks

Yes there is a way, its called debt management.

If your thinking about debt consolidation, then you should save yourself the time and trouble, and definitely think about debt management instead.

With debt management, all your interest is stopped (subject to creditor agreement), and you repay what you owe, at a lower rate, over a longer period of time, simple and stress free.

Wear as consolidation means borrowing more money, paying silly interest rates, can end in dismal failure if budget not stuck too, can even lead to bankruptcy, not recommended.

Paula1981

[Deleted User] said:

Do a full SoA on the debt free boards. It's not usually the biggest outlays you need to look at (although that food budget could be trimmed a bit, even in today's market).

We live on a island & only the co-op to buy shopping from. i have no choice but to shop there. Everyone here is struggling to afford food 

Brie

It's difficult when your choices are limited but I would expect that the food is not your only expense.  Well maybe it's YOURS but not the only household expense.  And how are you affording the food shop as well?  How much do you earn?  How much does everyone else in the household earn?  What are all the things you all pay for?  That's what we need to be able to help and why it's suggested you go to the Dealing With Debt board to get better assistance.