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

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  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
    You don't want to consolidate all of it, do you? Some of it is on decent rates.
  • System
    System Posts: 178,078
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    No, I worked out 4 refinance options this morning. Although I am keen to pay back the debt as soon as possible and the higher the loan, usually the lower the rate. I would prefer to keep the loans and credit cards on good rates separate. Just the high APRs I want to move.

    It is OK tho. I think I have just figured out a solution through our business manager.
  • Cropstar
    Cropstar Posts: 38
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    Everyone makes their own choices, but it's quite clear from what you've posted that nobody will see you as a good credit risk given the amount of debt you have.


    I would seriously think about how much you earn, spend and therefore how much you can pay back each month. Focus on the highest interest cards. Over time your interest payments will fall, freeing more to pay down the debt.



    If you start to make serious inroads into the debt, then you should start to become eligible for 0% balance transfer offers, take those to reduce the interest you paying on your credit cards (and close the old cards/reduce the limits so you are not tempted to use the credit). Less interest means you can repay more of the debt each month.


    I had a similar attitude to you (but only have around half that debt level). I find I can't get the absolute best deals but still have my credit card debt on 0% and a loan of 4.9%, which I've been making inroads into rapidly over the last few months. Interestingly as my debt has fallen my credit rating has steadily been improving.
  • sourcrates
    sourcrates Posts: 28,743
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    edited 5 August 2018 at 6:08PM
    lawero1 wrote: »
    Thank you.

    But maybe you could show me where I said the three assumptions you have claimed?

    1. I regret it
    2. I cannot afford the debt I have
    3. I think I have the right to consolidate my debt


    Hi,


    Re-write option 3, and call it The right to end up Bankrupt.

    Because, that is where the majority of debtors who consolidate end up, or in some other debt solution.

    You appear to be a bright, switched on chap, but it makes me cringe when i see people wanting to consolidate debt they simply cannot afford, you have not yet had your light-bulb moment, consolidation may take care of your debt in the short term, but you have accrued all that debt somehow, and if you carry on with the same lifestyle, you will accrue it again, after 8 years on these forums, i have seen it happen many times.


    These things tend to follow patterns you see, first you get one card, then another, and another, starts to get a bit much paying it back, so then you exhaust all the 0% deals, when they dry up, you look to consolidate, some people do this more than once, next step is debt management, if you are not careful, and listen to advice.


    Its good you were declined, although you will not see it as been so, the only sure fire way of paying down your debts, is by correct budgeting, formulate a budget, and stick to it, overpay when and where you can, snowball your debts, there are many ways to get rid of it, without resorting to further borrowing.

    Good luck with it, please take this advice in the helpful manner it was given.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • -taff
    -taff Posts: 14,428
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    lawero1 wrote: »
    But maybe you could show me where I said the three assumptions you have claimed?

    Okey Cokey

    1
    lawero1 wrote: »
    1. I regret it

    I said it looks like a regret, not that it was.

    2
    lawero1 wrote: »
    2. I cannot afford the debt I have
    lawero1 wrote: »
    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... It seems my only option is go to a debt consolidation agency/charity. But I don't want to do this.

    No-one goes to a debt consolidation agency/charity if they can afford their debt. And to be picky, I didn't say you couldn't afford it.

    3
    lawero1 wrote: »
    3. I think I have the right to consolidate my debt

    lawero1 wrote: »
    Surely it is crazy to say someone who would benefit most from a consolidation loan can't get one because they are trying to consolidate too much debt and save the most amount of money.

    Maddnes

    All of your posts are to do how great a time you had and you don't regret it.

    They are also about how much money you owe and why will no-one step in and take this unseemly amount of interest off you when logically, you would be so much better off without it. Why is there no 'innovative' company who will step in and pay this debt for you so you ca pay them bacl less than you are now paying....

    Everything you have said paints a picture of someone who had an amazing time doing wonderful things, but is now paying it back and doesn't like it.


    But you don't have to argue with me about it or listen to me at all, it's a public forum, you asked for responses and you got some. I, on the other hand, am not whinging about unfair interest charges or my level of debt.
    Shampoo? No thanks, I'll have real poo...
  • nic_c
    nic_c Posts: 2,928
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    Consolidation loans ARE mislabled, but its because they are usually higher APR aimed at people with debts. It's new debt and so you will always be considered as if you are not using to pay off credit cards.

    So are you making minimum payments on your 0% and 6.9% and maximising paying off the double digit cards first? How long will this take, and have you looked at your budget to maximise repayments.
  • meer53
    meer53 Posts: 10,217
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    Always best to do things that you can afford, then you never end up in your situation. If you can't afford to travel the world, then you just have to cross it off your list. This seems to be an alien concept to a lot of people. I'd like to travel more but i can't afford it, so i can't. It's not difficult. Your analogy of paying £10 or £15 works fine if it's £10 or £15, but i suspect your borrowing was more like 4 figure amounts so the analogy doesn't work.
  • Carrot007
    Carrot007 Posts: 4,534
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    I have read lots of stories these day on here that such loans are problematic like this.


    What happened to ones like I got after university. Say 1999? I went to my bank for a such a consoladation load and they wanted all my credit cards (all not just theirs, in fact I might not have had one with them), they cut them up there and then and delt with the paying of and closing the account themselves.



    Does no firm do anything like that anymore? Just curious.



    Not that it helped. I opened new accounts and had a further 2 consolidation loans before I worked out how to stop spending!
  • redux
    redux Posts: 22,976
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    lawero1 wrote: »
    I appreciate you trying to help.
    Imagine you were queuing for the most amazing thing you always dreamed off. Maybe it is a concert, a club, a plane to somewhere you have always dreamed of going. In front of you is an endless queue of people. It!!!8217;s £10 entry. You may get in, you may not. Then someone says to you, I will let you skip the queue but instead of paying £10, you have to pay £15.

    Would you do it?

    Some would, some would not. I am in the first camp. I choose to pay more by borrowing money to do the things I most wanted to do, while I had the chance, knowing very well that my future self would have to take the burden.

    If that £15 is rolled up with 3 years of interest at 26%, then it is £30. 6 years, £60. 9 years, £120. Etc.

    When people on here are talking about considering consolidation loans, even if they can apply and succeed, the advice from people here who have been in the situation themselves is extremely cautious, about the strong risk of things running away, the card balances creeping up again regardless.

    What is needed is the rigour to review patterns of spending, trim it, making more available to pay the highest rate balances down.

    By the sound of things not all of your borrowing is at the highest rates. Set yourself ambitions to be back ahead of when the 0% offers will end, and meanwhile start making decent dents in the high interest parts. Then it may become easier to rework some down to lower rates.
  • Larac
    Larac Posts: 945
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    With the level of debt your in, I would suspect you won't get a consolidation loan and you wont get 0% BT. I had a similar level of CC debt and ended up on a DMP - the debt was frozen and paid it off in 5/6 years. I also had a secured loan and as soon as that was paid off and the DMP I started to be offered % CC. Prior to that I was being offered sub prime CC. Your options are very limited - but I am not sure you have grasped this. As others have said nobody knows whats coming around the corner so don't assume you will be in a position to service the debt in the future.
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