MBNA Loan Declined after being pre-approved

QuidKid

Hi,

Looking for some help in understanding this. I applied for a £25,000 loan over 5 years with MBNA for home improvements earlier, but I was declined at the last step. I went through the pre-approval process on their website and that was absolutely fine with a soft check.

The reason I'm so confused about it is because I have a near perfect credit score and even have a 100% score with Experian. My credit reports all look good and there are no late payments or anything to cause concern. My income is also fine and that was checked with the pre-approval process anyway. My partners income wasn't taken in to account but that would make it even more affordable.

The only thing I can think of is that I have a credit card with a fair allowance not being used.

Does anyone have any idea what MBNAs process around this is and whether it's worth appealing?

Thanks!

robber2

whats you annual salary and credit limit on your card(s)?

QuidKid

Salary is just under 50k. Household income is 110k. Credit limit is currently 30k with 15% utilisation.

[Deleted User]

Much more due diligence required, then you'll see why this question is asked all the time on here.
The information is right here, on this subforum, spend a while reading and you'll understand why this happens all the time.

mcpitman

Adzydt said:

Salary is just under 50k. Household income is 110k. Credit limit is currently 30k with 15% utilisation.

You are asking for a loan of 50% of your annual income. Whilst having an ability to utilise a further 60% of your salary through a Credit Card. Total exposure = 110%.

If passed for manual review/underwriting (referred status), they may question if you carry a balance on a CC, why if you can afford the repayments on a loan.

Assuming on a 50k salary you are taking home c£3200 per month, a £25k loan over 5 years at best will be c£500 per month repayment, CC as min pay at £100 p/m. Dependent on other commitments you may have (mortgage, mobile, car loans/PCP etc) you may have also failed the affordability test.

Just my thoughts.

sourcrates

On a household income of £110,000 why on earth do you need to borrow ?

TractorFactor

mcpitman said:

Adzydt said:

Salary is just under 50k. Household income is 110k. Credit limit is currently 30k with 15% utilisation.

If passed for manual review/underwriting (referred status), they may question if you carry a balance on a CC, why if you can afford the repayments on a loan.

Does that mean you should close old credit cards if you no longer use them?
Meaning you'd have less available credit, but perhaps more likely to be successful in securing a loan?

adamp87

TractorFactor said:

mcpitman said:

Adzydt said:

Salary is just under 50k. Household income is 110k. Credit limit is currently 30k with 15% utilisation.

If passed for manual review/underwriting (referred status), they may question if you carry a balance on a CC, why if you can afford the repayments on a loan.

Does that mean you should close old credit cards if you no longer use them?
Meaning you'd have less available credit, but perhaps more likely to be successful in securing a loan?

I think they meant more you’ve said you have £30k of credit with £4,500 used.

So now you are after a loan on top of that, but are carrying £4.5k on a card - how do they know you can afford the loan when your card has a few thousand used already?

mcpitman

TractorFactor said:

mcpitman said:

Adzydt said:

Salary is just under 50k. Household income is 110k. Credit limit is currently 30k with 15% utilisation.

If passed for manual review/underwriting (referred status), they may question if you carry a balance on a CC, why if you can afford the repayments on a loan.

Does that mean you should close old credit cards if you no longer use them?
Meaning you'd have less available credit, but perhaps more likely to be successful in securing a loan?

There's a lot of factors, but a history of having available credit and only using and paying off in full when required can help provide an impression of credit worthiness (or using credit responsibly)

Having £10k credit available through Credit cards on £20k a year is a different answer to an income of £100k.

Carrying balances is what unnerves some providers, having high limits on one card others, sums of small limits amassing to high limits with other providers.

Lots of factors and no straight answer unfortunately.