Pre-approved loan for consolidation

ukfff54321

enthusiasticsaver said:

I won’t labour the point that debt consolidation usually doesn’t work but I would ask why you haven’t applied for BT cards? If they won’t give you £11500 based on affordability they may give you the option of transferring some saving you interest. If they won’t give you any then you won’t get a decent rate for debt consolidation anyway as lenders presumably perceive you are carrying too much debt already. 

Exactly that! In my mind I was trying to avoid taking out a second credit card due to the fear of maintaining two and the potential negative impact that would have on my credit report. But as suggested as well by another forum member, even if the credit limit doesn’t stretch to the full amount - every little helps!

That being said, I pressed the apply button earlier and it was approved with my desired credit limit. So balance transfer will be done as soon as it arrives and my other card will be cut up and account closed 😊

FashionHeart

ukfff54321 said:

Been looking for a loan to pay off my credit card (approx 11k) which mounted up buying bits for my house renovation. I currently have a small personal loan with Zopa which I am looking to increase by 18k over 5 years which will clear my credit card and the remainder of my car HP agreement. The monthly repayments are the same as just my car HP alone so as I am clearing this, the affordability is good.

I currently have another credit card which I am paying off as it’s on a 0% deal so will leave that where it is.

The main reason for going for this consolidation loan is to clear the credit card I am paying close to £180 a month interest on.

Anyway, my main question is when I am marked as pre-approved by the lender (Zopa in this case) with a guaranteed APR and I currently have a loan with them, is this pre-approval true in the sense of approved or does is mean nothing?

I have never been refused credit but my main concern is being refused as I seem to recall a common question on credit applications being “have you ever been refused credit”. That suggests to me that if my application is in fact refused - I will need to answer yes to that forever more!

The reason for going with Zopa is the pre-approval but I also have Tesco as an option with 95% chance of approval but a much lower APR.

Not sure which way to go. 

It's a mixed bag with consolidation loans.
Saying from personal experience, pre-approval means absolutely nothing until you are actually approved for the loan.
I can remember the days when applying for loans, you don't have additional checks involved.
I've personally had a few loans with Zopa and they have always approved my loan applications, but it's all to do with additional checks now.

sourcrates

FashionHeart said:

ukfff54321 said:

Been looking for a loan to pay off my credit card (approx 11k) which mounted up buying bits for my house renovation. I currently have a small personal loan with Zopa which I am looking to increase by 18k over 5 years which will clear my credit card and the remainder of my car HP agreement. The monthly repayments are the same as just my car HP alone so as I am clearing this, the affordability is good.

I currently have another credit card which I am paying off as it’s on a 0% deal so will leave that where it is.

The main reason for going for this consolidation loan is to clear the credit card I am paying close to £180 a month interest on.

Anyway, my main question is when I am marked as pre-approved by the lender (Zopa in this case) with a guaranteed APR and I currently have a loan with them, is this pre-approval true in the sense of approved or does is mean nothing?

I have never been refused credit but my main concern is being refused as I seem to recall a common question on credit applications being “have you ever been refused credit”. That suggests to me that if my application is in fact refused - I will need to answer yes to that forever more!

The reason for going with Zopa is the pre-approval but I also have Tesco as an option with 95% chance of approval but a much lower APR.

Not sure which way to go. 

It's a mixed bag with consolidation loans.
Saying from personal experience, pre-approval means absolutely nothing until you are actually approved for the loan.
I can remember the days when applying for loans, you don't have additional checks involved.
I've personally had a few loans with Zopa and they have always approved my loan applications, but it's all to do with additional checks now.

Way, way back in the late 1980`s, early 1990`s, companies such as Barclaycard would write to certain customers, pre-approving them for loans/credit cards etc.

You simply filled in the short form they sent you, and about a week later, the card arrived, with a 10k limit, even though you only earned 6k a year back then, or the loan of 10k was deposited in your chosen account, with virtually no questions asked, happy days you might say, well no not really, because that was how I personally got myself into persistent debt that lasted until my early 40`s.

Obviously things are now different, but if a bank smells a way to make money......well.

Brie

ukfff54321 said:

That being said, I pressed the apply button earlier and it was approved with my desired credit limit. So balance transfer will be done as soon as it arrives and my other card will be cut up and account closed 😊

Hope everything is continuing according to plan.  Just to add my word of caution....don't use the card with the BT for purchases as you'll be paying interest from the date of the purchase.  Do the BT, set up a minimum DD at least (sometimes I set a set amount above the minimum) and put that card in the desk drawer.  Continue to use your current card for any day to day purchases and set up that DD to pay in full each month.  You might want to think about decreasing the credit limit on it to avoid that horrid temptation that others refer to and make you look a better bet for your mortgage renewal.