Trying to reduce interest loans - getting declined

wrighty11

Hello there, 

So, I've been doing some cost calculations, I occasionally check my finances and see what I can do to improve things. At this point, I have two loans working out at £17,400. paying these off with the interest is working out about £548 a month, I can afford this but I want to try and consolidate and try and save some money.

I've checked online and keep getting declined on loan apps despite having the affordability and then some. Its so frustrating because if I were to consolidate, i could reduce the payment from 550 to 367! 

I'm just kinda at my witts end with "computer says no" when I can clearly do it. Has anyone else had this issue and manage to resolve it? 

Brie

Why do you have these loans?  Is there an ongoing underlying problem that needs to be addressed?  

Is there any option to overpay one or both?  If so hit the one with the highest interest rate - even a fiver a month will save you some money.  

As to why you get turned down.....what you are asking for is to have a loan of £17400 in addition to the £17400 you already owe.  Yes, you intend to use the new loan to pay off the old ones.  But they don't know that for sure and so they have to consider that you are going to take the new money and place it all on Redrum to win down the bookies. 

So you need to look at a different solution.  As I've said - can you overpay?  Alternatively if you have a credit card that is completely unused and with a decent limit on it AND have a 0% money transfer option available maybe that could be used to clear a chunk of debt.  Just be sure that you clear that balance before the offer ends so you don't get hit by silly high interest charges. 

And if you want some more help with your finances why not fill out a SOA (see the link below in my signature) and post it back here to get some advice on how to tighten up your budget. 

sourcrates

This is the debt free wannabe board, and as a general rule we don`t advise consolidation as a way to reduce outgoings, as it seldom works out that way.

In fact those that do so, tend to increase their indebtedness due to the fact they think they have more disposable income to play with, when in reality the bad financial decision making still continues, plus the extra interest and longer terms of consolidation loans just keep you in debt longer, and encourage you to take out further borrowing, so you tend to end up in much deeper debt only a short time later.

Most people that come here for help have consolidated 3/4 times previously before the penny drops with them.

If you`d like me to move this to the loans board, I`d be more than happy to, or you can fill out your SOA and well see if we can help you reduce your outgoings with a more sensible solution?.

Isthisforreal99

It's not about 'computer says no' it's the fact to a potential lender there is no guarantee you will pay the existing loans off, so instead if you owing £17.4k you would then be owing £34.8k in total.

How much is your income v outgoings?

Stop applying for at least 6 months, if you are doing full applications then a hard credit search goes on your credit file. Then maybe look to consolidate the higher APR loan alone.

wrighty11

I actually never thought of it that way.... which is pretty dumb on my point.

I think the frustration of being declined means I cant reduce my payments by nearly £200 which could go on over paying or saving. 

RAS

The whole idea of lending money to the public is to extract as much more than lent in interest.

One recent poster borrowed £1200 and was due to repay £3600 in five years. The interest rate must have been horrendous. She hadn't really realised the cost of her borrowing.

Basically why saving is often worth so much more than the face value. Save £100 a month and you've got £1200.