Debt consolidation Loan

deckaguk

Hi, when doing soft eligibility checks for a debt consolidation loan, I keep getting "sorry we aren't able to offer you a loan", from numerous lenders including those I already have accounts or credit cards with who are emailing me suggesting I take a loan to consolidate debt.

I have approx £15K on credit cards (just under 70% utilisation) and have 2 loans , both due to finish in the next 12-18 months combined circa £3.5-4K. 

I have checked my credit file and have no red flags - 'excellent' on Equifax, 'good' on experian and 'fair' on creditkarma.  20 years credit history with never a payment missed, got a mortgage, on electoral role, etc. None of them flag anything other than the credit card utilisation.

I'm assuming they take credit card debt into account or could it just be  there are already 2 loans open and having 3 loans is excessive?  Just trying to work out if its best to focus on clearing down the 2 loans early in order to get a debt consolidation loan for the credit card debt (quicker and cheaper in long term). Or just keep plugging away at the cards (which will take forever). 

MorningcoffeeIV

You have too much debt. Your pretend credit ratings from the CRAs aren't seen by anyone - it's all about the risk.

Pay down your existing debts. Don't consolidate.  Go to the DFW boards for help on repaying faster.

secla

You dont say what your wage is but they will take into account your total debt regardless if your telling them its for debt consolidation as they have no way making you pay of the cards, So they will base it on 19k + whatever you want to borrow.

Brie

secla said:

You dont say what your wage is but they will take into account your total debt regardless if your telling them its for debt consolidation as they have no way making you pay of the cards, So they will base it on 19k + whatever you want to borrow.

Worse than that they will base it on the total amount of CREDIT you have right now of about £26k (CCs at £22k with the £15k debt being 70% of the credit plus £4k in loans) PLUS the £19k you want to borrow to pay the rest off.  Because they've no way to know you'll actually pay off the debts.

So can your salary support £45k of debt?  Sounds like that's why you're being told no.

Also I would suspect that they are aware you are having trouble with the £19k so again don't want to get you into more trouble.

Best to head to the debt free board (wherever that is now) and do a statement of accounts (on a sticky?) and let the good folks there help you sort out a budget that will allow you to pay down the outstanding amounts.

_Penny_Dreadful

deckaguk said:

Hi, when doing soft eligibility checks for a debt consolidation loan, I keep getting "sorry we aren't able to offer you a loan", from numerous lenders including those I already have accounts or credit cards with who are emailing me suggesting I take a loan to consolidate debt.

I have approx £15K on credit cards (just under 70% utilisation) and have 2 loans , both due to finish in the next 12-18 months combined circa £3.5-4K. 

I have checked my credit file and have no red flags - 'excellent' on Equifax, 'good' on experian and 'fair' on creditkarma.  20 years credit history with never a payment missed, got a mortgage, on electoral role, etc. None of them flag anything other than the credit card utilisation.

I'm assuming they take credit card debt into account or could it just be  there are already 2 loans open and having 3 loans is excessive?  Just trying to work out if its best to focus on clearing down the 2 loans early in order to get a debt consolidation loan for the credit card debt (quicker and cheaper in long term). Or just keep plugging away at the cards (which will take forever). 

It sounds like you’ve hit the ceiling with how much you’re able to borrow. Those two loans you already have, were those for consolidating debt? 

sourcrates

Brie said:

Best to head to the debt free board (wherever that is now) and do a statement of accounts (on a sticky?) and let the good folks there help you sort out a budget that will allow you to pay down the outstanding amounts.

We are still here -

Debt-free wannabe — MoneySavingExpert Forum

Consolidation loans allow banks to profit from your misery, they rarely clear your debts.

Its not unusual for someone to consolidate debt 3/4 times before they realise their folly.

On DFW we can advise you on the best ways to reduce your debts, be it by better budgeting, informal means, or a more formal debt solution (circumstance dependant).

enthusiasticsaver

Debt consolidation loans rarely help with paying down debts. Were the other 2 loans for the same reason? Are the credit cards charging interest or are they at 0%? Essentially there is no quick fix to paying off debt.  Budgeting and overpaying as much as  you can is the way to go. 

FashionHeart

deckaguk said:

Hi, when doing soft eligibility checks for a debt consolidation loan, I keep getting "sorry we aren't able to offer you a loan", from numerous lenders including those I already have accounts or credit cards with who are emailing me suggesting I take a loan to consolidate debt.

I have approx £15K on credit cards (just under 70% utilisation) and have 2 loans , both due to finish in the next 12-18 months combined circa £3.5-4K. 

I have checked my credit file and have no red flags - 'excellent' on Equifax, 'good' on experian and 'fair' on creditkarma.  20 years credit history with never a payment missed, got a mortgage, on electoral role, etc. None of them flag anything other than the credit card utilisation.

I'm assuming they take credit card debt into account or could it just be  there are already 2 loans open and having 3 loans is excessive?  Just trying to work out if its best to focus on clearing down the 2 loans early in order to get a debt consolidation loan for the credit card debt (quicker and cheaper in long term). Or just keep plugging away at the cards (which will take forever). 

It's not just about your 'good' credit score and your history, they also look at your current debt and how much of it you can afford to pay off.
If you are in too much debt, they will look at you as a  high risk.
As for debt consolidation, there is nothing set in stone for you as a borrower to say that you intend to pay your current debts off, that's why it is viewed as a high risk to them.

MEM62

deckaguk said:

Hi, when doing soft eligibility checks for a debt consolidation loan, I keep getting "sorry we aren't able to offer you a loan", from numerous lenders including those I already have accounts or credit cards with who are emailing me suggesting I take a loan to consolidate debt.

You have reached the limit of what mainstream lenders are prepared to lend to you.  This is actually doing you a favor as consolidation rarely works.  You cannot borrow your way out of debt.  

I have approx £15K on credit cards (just under 70% utilisation) and have 2 loans , both due to finish in the next 12-18 months combined circa £3.5-4K. 

I have checked my credit file and have no red flags - 'excellent' on Equifax, 'good' on experian and 'fair' on creditkarma.  20 years credit history with never a payment missed, got a mortgage, on electoral role, etc. None of them flag anything other than the credit card utilisation.

It may well be the ratio of debt the income that is preventing further lending.  

I'm assuming they take credit card debt into account or could it just be  there are already 2 loans open and having 3 loans is excessive?  Just trying to work out if its best to focus on clearing down the 2 loans early in order to get a debt consolidation loan for the credit card debt (quicker and cheaper in long term). Or just keep plugging away at the cards (which will take forever). 

You need a plan B.  Complete an SOA to see where you can cut back on your current spending and find extra money the throw at your debts.  Throw the extra money at the highest interests rate debt first and, when that is cleated, the next highest rates and so on.  

..............................................