Help! Unaffordable loan advice

Curiouspug

Hello!
does anyone have any thoughts on whether my loan should have been approved….

I took out a loan to consolidate some of my debt £25,000 back in September last year with repayments of £711 pm I already had £32,000 worth of debt over other loans and credit cards….( not including my car HP)

My income at the time was about £2,200 take home give or take….

My regular
DD totalled £800 car, phone, pet insurances etc….

my other debts which I was consolidating was about £1000 but with the new loan would not cover all of the debt meaning I would still be paying on those too! 

Most months I would end up in my overdraft ( yes probably have been living beyond my means but when I took my car and other loans I was earning almost double my wage so got into a little pickle! 

My original application for the loan was declined after providing bank statements etc l….

i have always had good credit rating as I’d never missed or been late with any payments…. So I can only think this would have been down to affordablilty and DTI ratio….
however within 2 hours of the decline my loan had been approved….

I'm now in a worse financial situation than I have ever been! 

My credit cards have been going up due to not having money left after bills and general expenditures of life!

I’m stuck in a loan for another 40 months at 19% apr l…. I can’t get any more credit cards to balance transfer so essentially I’m paying silly amounts of interest and only affording minimum payments in my cards to avoid being in arrears! 

I’m at breaking point with my mental health suffering…. 

I have lodged a complaint with admiral as I do believe that I shouldn’t have been offered the loan based on my DTI ratio and spending trends and overdraft usage..::

would you think I’ll have a chance to have a complaint being resolved? 

fatbelly

It doesn't really matter what we think.

Admiral are likely to reject your complaint

You can then escalate it to FOS and it is their findings that mattter.

Process here

https://debtcamel.co.uk/refunds-large-high-cost-loans/

If you need help on the whole situation, post on debt free wanabee

sourcrates

Consolidation of debt is normally one symptom of ongoing bad financial choices, and its seldom the right strategy to deal with your debts.

Your story is a familiar one, your debts are higher than the amount you can borrow, but you do it anyway, as you wrongly assume it will be ok, the bank may pretend to care and do checks, but most of the time they approve loans that should never have seen the light of day.

You have to keep in mind the bank has a duty of care to its customers, and you don`t, that shifts the onus onto them to get it right, and they don`t always do that.

As fatbelly says, they will likely reject your complaint, and it will be down to the FOS to decide on it.

saker75

You absolutely need professional advice. Speak to CAP and get this sorted. You can’t go on like this. 

eschaton

You need to control your spending not that you need anyone to tell you that. 

Buy what you can afford and not what you can’t. Also pay a visit to the DFW forum. 

Curiouspug

eschaton said:

You need to control your spending not that you need anyone to tell you that. 

Buy what you can afford and not what you can’t. Also pay a visit to the DFW forum. 

Thanks 👍
I’m not here to be told that my previous spending was clearly out of control I’m fully aware as I have stated above. One of my issues was being on a very high salary at a young age early twenties and living to & beyond my means…. In a reality what young person doesn’t like to splash out a little when they can as there isn’t that family/ house that you have to be budgeting for! 

I had to also pay for a surgery at 23 which I wasn’t able to get covered on the NHS 

When I took a pay cut to help with my mental health and a health condition which meant that i couldn’t continue to commute 3 hours a day it meant I got in a worse position due to interest rates and increase in everyday living costs ….. I have been tight with money now but since my loan and other outgoings take up 95% of my wages it’s hard to not end up in a worse position….. there’s unexpected expenses over the last 2 years which I have read is meant to be included in stress testing before borrowing! 
car repairs, health issues which meant I had to pay for medication which wasn’t actually available on the NHS…. Please don’t judge with the “only buy what you can afford” as you don’t actually know people’s full life story which led to this position.

but I will check out the other forum/ support channels 

Altior

In theory swapping one liability for another shouldn't increase the pressure on your monthly outgoings. 

If your liability was £32K before the loan of £25K, and the £25K was used to settle existing liabilities, your liability was still £32K, just with a different lender on different terms. 

What were your monthly repayments on the existing liabilities of £32K before the Admiral consolidation loan, and the subsequent remaining £7K after paying off £25K? And what interest rate?

sourcrates

@Curiouspug

Here is the link to the debt camel site, it tells you all you need to know about affordability complaints:

How to get refunds from catalogues and credit cards · Debt Camel

retiredbanker1

Obviously all the advice above is good - can I just ask one question to the OP which might affect any unaffordability decision.
I take it you put down the reason for the loan as debt consolidation? So you paid off £25k of debt at what rate and what was the total outgoings for the £25k debt?

What I am getting at is - are you better off now with the loan because the monthly repayments are lower than if you had continued to pay the debt and also presumably at a lower interest rate?

ManyWays

A consolidation loan can sometimes not be much cheaper than minimum payments on card debts being cleared; so if the card debts were unaffordable, the large loan may still be unaffordable even if it is less unaffordable tjhan the cards. Just comparing interest rates doesnt help with this.

MEM62

Curiouspug said:

eschaton said:

You need to control your spending not that you need anyone to tell you that. 

Buy what you can afford and not what you can’t. Also pay a visit to the DFW forum. 

Thanks 👍
I’m not here to be told that my previous spending was clearly out of control I’m fully aware as I have stated above. One of my issues was being on a very high salary at a young age early twenties and living to & beyond my means…. In a reality what young person doesn’t like to splash out a little when they can as there isn’t that family/ house that you have to be budgeting for! 

I had to also pay for a surgery at 23 which I wasn’t able to get covered on the NHS 

When I took a pay cut to help with my mental health and a health condition which meant that i couldn’t continue to commute 3 hours a day it meant I got in a worse position due to interest rates and increase in everyday living costs ….. I have been tight with money now but since my loan and other outgoings take up 95% of my wages it’s hard to not end up in a worse position….. there’s unexpected expenses over the last 2 years which I have read is meant to be included in stress testing before borrowing! 
car repairs, health issues which meant I had to pay for medication which wasn’t actually available on the NHS…. Please don’t judge with the “only buy what you can afford” as you don’t actually know people’s full life story which led to this position.

but I will check out the other forum/ support channels 

You are where you are with it and you do not have to justify your history to anyone.  The important thing is that you understand how you got here so that you do not rinse and repeat.