12 k in debt, loan declined, advice please..

jotto_3

Firstly hi to all, great site.

OK, my problem is that I am 12k in debt. This is spread over 3 credit cards and an overdraft.
I have actually been reducing the amount by changing cards frequently etc but as I always only pay the minimum amount its taking a long time.

I decided to try for a Northern Rock loan....but was declined.
I have had loans in the past ( inc NR ) and never had a problem getting them. What should I do ?

Its getting to the point where there is far too much month left at the end of the money!!!

I have set myself a strict budget, cut up my credit cards and was really banking on the loan coming through...

I thought about secured loans, I have a property worth around 200k with an 85k mortgage outstanding, but it seems strange that interest rates on secured loans are higher than unsecured.

Any help or advice would be greatly appreciated. ???

System

I considered myself to have a reasonably good credit rating, and once, I think at some stage last year, applied for a Northern Rock loan.

I think Northern Rock, whilst their rates are one of the lowest, are one of the most picky when it comes to being accepted. I tried once with them and won't even bother with them again in the future.

This is from personal experience - earlier this year, I applied for a £10k loan from Egg. This was when I had 2 loans and 2 credit cards with a running debt of just under £10k. They accepted me, sent me the paperwork but in the end I ripped it up as I didn't relish paying them back over 7 years.

You could try them, you would need to check their APR - just remember that there may be better deals out there. I know that with Egg you can overpay if you are ever in the position to.

With the credit card thing - get your card issuer to 'close' the account. I did this with an Egg card. That way there is no way anything can be put on it. If you are anything like me, I'd have written the number down somewhere 'just in case'. Then in a moment of weakness I'd buy something online.

robnye

I thought about secured loans, I have a property worth around 200k with an 85k mortgage outstanding, but it seems strange that interest rates on secured loans are higher than unsecured.

Any help or advice would be greatly appreciated.  ???

secured loans with loan companies are higher interest rates.

I have a flexi loan thru my mortgage company, which is at their standard rate, so slightly higher than normal mortgage rate, they have calculated it over 20 years, for the minimum payment, (£70 per month), but i am paying an additional £120 per month, which will help repay the whole loan in 5 years (less 6 months - i took it out in Feb 04)

As long as you are prepared to make additonal payments, this type of loan can be useful.... it is not for all though

dollywops

Firstly hi to all, great site.

OK, my problem is that I am 12k in debt. This is spread over 3 credit cards and an overdraft.
I have actually been reducing the amount by changing cards frequently etc but as I always only pay the minimum amount its taking a long time.

I decided to try for a Northern Rock loan....but was declined.


Hi 12 k in debt

I have just sent you a pm.
I have had loans in the past ( inc NR  ) and never had a problem getting them. What should I do ?

Its getting to the point where there is far too much month left at the end of the money!!!

I have set myself a strict budget, cut up my credit cards and was really banking on the loan coming through...

I thought about secured loans, I have a property worth around 200k with an 85k mortgage outstanding, but it seems strange that interest rates on secured loans are higher than unsecured.

Any help or advice would be greatly appreciated.  ???

dollywops

Hi 12k in debt

My reply did not work. I have just sent you a pm

jotto_3

Dollywops, thanks for your help but im not sure i would get a credit limit big enought on any credit card to cover the debts...if anyone knows different please post!!!!

I also decide to apply for a tesco loan as they were advertising 6.6 % which didnt make a huge difference to the repayments. I applied for 12k over 10 years....

In the post today got acceptance letter from tesco....12k over 5 years and at 9.5%!!!! AAAAAAAAHHHH!

Rafter

Worth getting hold of your credit file to make sure everything is accurate.

If you have applied for credit recently, aren't on the electoral role or have missed a couple of payments on your cards, this may count against you.

How old is your mortgage? Who with? Who do you bank with?

You may find that remortgaging for 12k more, on a better deal than you are on now you might save overall.

Just make sure that a. You don't run up your credit cards again. b. you don't spread the 12k debt over the next 25 years but pay it off at say £333 per month over 3 years by making overpayments on your mortgage or transferring to savings.

Good luck.

R.

ploppy

Also worth noting that applying for a lot of loans (over 3) in a short period of time will also go against you. Made the mistake of applying for a few loans over the internet last year, website stating 6.5% but when they came through they were offering 9.5% - 12.9%, just tore 1 up then applied for next 1, only for the same to happen again. Eventually went to my local bank where they explained to me that applying for several loans is a no no and can effect you being offered a loan.
Thought I'd just mention in case it helps. ::)

jotto_3

Well after lots of looking around and talking to a few loan companies I have come up with the following.

12k over 10 yrs £139.06 per month @ 7.2%.

This doesn't seem like too bad a deal. At least the loan is paid off after 10yrs instead of a lot longer than by just making minimum credit card payments. I also have the option to over pay...not that I think it will be possible due to the new tight budget.

Credit cards have been cut up...all except one for absolute emergencies ( honest! )

Will now do best to stick to my budget...if I cant afford it, I cant have it.

Any comments on this proposed deal? THX.

PhilWales_2

Out of interest have you had the online credit score from equifax/experian