How the flip are you meant to get a debt consolidation loan if your declined because your debt high!

Legacy_user · 5 August 2018 at 1:39PM

It's so frustrating.

I have £31,500 I would like to refinance as it's now on 25% interest rate (mostly credit cards). I was swapping it around, but can no longer do that.

My credit score is 701 (poor), ONLY due to affordability. Never missed a payment. No late payments. No CCJs or otherwise. Not a homeowner either, which for some bizarre reason counts against you.

If I could combine into a nice say 7% APR loan over a longer term (5 years), I've worked out it would save me £281 a month.

It seems my only option is go to a debt consolidation agency/charity. But I don't want to do this. I want to pay my way. I don't mind paying the interest. And I imagine having arrangements with creditors would kill my credit score.

So what is a guy left to do???

Willing2Learn · 5 August 2018 at 1:44PM

Hi lawero1 and welcome to the forum

If you are always struggling with repayments how do you know it will be any different with a consolidation loan?

Why not start by looking at how you are budgeting?

It might prove useful for you to post your SOA (Statement of Affairs) so that people here can give best advice.

http://www.stoozing.com/calculator/soa.php
Please format SOA by clicking on the 'format for MSE' button at the bottom of the form.

System · 5 August 2018 at 1:56PM

Thank you. But it!!!8217;s OK. I!!!8217;m on top of my finances.

But if there is an opportunity to reduce my interest rate from 25% to 7% say, then I!!!8217;d like to take advantage.

That extra £281 saved a month can go off the loan, not interest payments as it does not.

It!!!8217;s more the frustration that I cannot consolidate my credit card debts into one loan, but ironically, I have too much debt.

Surely someone will no cr

System · 5 August 2018 at 1:57PM

Sorry, not sure what happened with the site/reply there.

To finish my point. Surely it is crazy to say someone who would benefit most from a consolidation loan can!!!8217;t get one because they are trying to consolidate too much debt and save the most amount of money.

Maddnes

Willing2Learn · 5 August 2018 at 1:58PM

How much is your combined credit limit total on the credit cards?

System · 5 August 2018 at 2:01PM

£48,000 credit limit.
Some on 6.9% for life.
Some on 0% until 2020.
Some on 18%
Some on 25%
Two loans (5% and 10%)

elsien · 5 August 2018 at 2:01PM

Perhaps they're thinking that if you consolidate the credit cards, it then leaves them empty to rack it up till the limits again. Which would then leave you in more strife.
And before you say you wouldn't do that, everyone says they wouldn't then many proceed to go on and do just that.

System · 5 August 2018 at 2:03PM

Yes. This is a very valid point!

Although... surely payments never being late or missed is a big indicator the person knows how to manage their credit score.

Surely this is what credit scores are for? To assess a persons credit worthiness and past history.

Willing2Learn · 5 August 2018 at 2:07PM

lawero1 wrote: »

... surely payments never being late or missed is a big indicator the person knows how to manage their credit score.

Surely this is what credit scores are for? To assess a persons credit worthiness and past history.

Affordability is a big part of how a lender assesses a potential borrower during an application for a fresh line of credit.

And your CRA credit score is meaningless. A lender scores you against their independent criteria and policies and come up with their own score.

It is a bit worrying that you already have two outstanding loans. How much are they for? Do you have any other debts?

elsien · 5 August 2018 at 2:08PM

Credit score in itself is a fairly meaningless concept.
Each loan company will have its own criteria that it uses to decide who it wants to lend to and at what cost, regardless of what numbers the credit reference agencies have decided to attach to your name.
If you're managing the debts by just paying the minimum off and you're carrying a high level of debt that's not going to look great even if you're not missing any payments. That could indicate that you're already right at the limits of affordability.

System · 5 August 2018 at 2:13PM

Yes. It!!!8217;s all worrying. Hence the debt consolidation. I had hoped the business would have grown more. But best made plans and all that.

When I was young, I made a decision based on observations of older people. It seemed that when you!!!8217;re young you have the opportunity (travel etc) but not the money. When you!!!8217;re older, you have the money, but no longer the opportunity (kids etc).

So I decided I!!!8217;d borrow to do all the things I!!!8217;d love to do while I could and I was happy to pay more for the privilege.

I have no regrets. I!!!8217;m happy to be paying this debt. But if there is an opportunity to lower my interest payments, I!!!8217;ll take it.

Seems I!!!8217;m all out of options on that front tho. So stick with it I will.

How the flip are you meant to get a debt consolidation loan if your declined because your debt high!

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free