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  • FIRST POST
    • ChocolateLabOwner
    • By ChocolateLabOwner 15th Aug 19, 8:08 PM
    • 10Posts
    • 2Thanks
    ChocolateLabOwner
    In trouble with Debt - Now cannot get a loan
    • #1
    • 15th Aug 19, 8:08 PM
    In trouble with Debt - Now cannot get a loan 15th Aug 19 at 8:08 PM
    Hi, as the title suggests myself and my wife are in trouble with debt and I cannot get a loan to cover it, even though I have a good credit rating.


    Im looking for some advice on where to go next, as the stress is now getting to me and is starting to effect my life, work and marriage, and I cannot let my family down.


    I will start by saying I have had a god search around the site and read a lot of threads, but nothing has been very relevant to my situation.


    Firstly, some background. I am 32 year old male, married and 2 kids. I have a house with a mortgage, and 3 bank loans in may name only, with my own bank. I am employed full time and receive a good monthly pay. I alone pay the mortgage, services bills and council tax. I use the Clear Score app to track my credit rating, which tells me I am 'soring high' and a good 60 points above my area average and the UK average.
    My wife has multiple small loans in her name, a poor credit rating and has been poor with money control, prior to our marriage. She is not on the mortgage, and dose not contribute towards the household services bills, but does do the shopping.


    We both have a car each, and the youngest is in nursery (with a monthly bill). other bills are the usual phones, internet etc.


    Now, the problem.
    Only one of my loans is for me. I took the other two out to cover my wife's debts. At the time this was not an issue and she paid me the monthly cost. But then Her father died and things got off track and out of hand. The outcome of this, a few months on, was that she became dependant on 'payday loan' companies instead of talking to me. This went on for a short while until it all came to light and we talked it through and sat down to make a spreadsheet of all the debts. After we had worked out a total of her debts and the 3 loans I have, I started looking at one loan to cover them all, to pay off my wife's payday companies and to consolidate my 3 bank loans into one loan to leave us with one easy payment split between the two of us. I have been looking for this loan in my name only, as I am under the impression (from my clear score app) that I have a very good credit rating and that will give me more opportunity or chance of being accepted.


    Except I am not being accepted.


    Now, I feel like I have worked all my numbers and figures out correctly, and the new loan total and monthly payments (split between the 2 of us) would be lower than what we are both paying currently. But I am still being rejected. I feel like our total debt is not high, even though its higher than I would want it to be, in comparison to some cases I have read about on this site.


    Im Looking for what im doing wrong, or where I can turn to next. Thank you
Page 1
    • zx81
    • By zx81 15th Aug 19, 8:23 PM
    • 23,562 Posts
    • 26,169 Thanks
    zx81
    • #2
    • 15th Aug 19, 8:23 PM
    • #2
    • 15th Aug 19, 8:23 PM
    Your credit rating is made up. No one sees it but you as it has no meaning and doesn't reflect your credit worthiness.

    The reason you're being declined is that you have too much debt. You need to cut your costs and clear the debts.

    Visit the DFW boards for help.
    • ChocolateLabOwner
    • By ChocolateLabOwner 15th Aug 19, 8:28 PM
    • 10 Posts
    • 2 Thanks
    ChocolateLabOwner
    • #3
    • 15th Aug 19, 8:28 PM
    • #3
    • 15th Aug 19, 8:28 PM
    I will have a look at the boards now thank you.

    I agree that i have debts, but this one loan would cost us less and be easier to pay, im not sure why that cannot been seen by a lender. For as complicated as money lending is, this seems to be a pretty obvious fix.

    And if a credit rating is made up, why is it so bloody important to everyone?!
    • zx81
    • By zx81 15th Aug 19, 8:31 PM
    • 23,562 Posts
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    zx81
    • #4
    • 15th Aug 19, 8:31 PM
    • #4
    • 15th Aug 19, 8:31 PM
    Lenders have to assume that you won't pay off your existing debts and will end up owing twice as much, which is what many borrowers choose to do.

    Credit ratings aren't important to anyone. The financially illiterate tend to like them though. It's a hard problem to fix.
    • DCFC79
    • By DCFC79 15th Aug 19, 8:32 PM
    • 34,929 Posts
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    DCFC79
    • #5
    • 15th Aug 19, 8:32 PM
    • #5
    • 15th Aug 19, 8:32 PM
    I will have a look at the boards now thank you.

    I agree that i have debts, but this one loan would cost us less and be easier to pay, im not sure why that cannot been seen by a lender. For as complicated as money lending is, this seems to be a pretty obvious fix.

    And if a credit rating is made up, why is it so bloody important to everyone?!
    Originally posted by ChocolateLabOwner
    So your wanting to consolidate, the problem is consolidating rarely works, in any casethe lenders have no no idea you will use the loan for the purpose you have in mind.

    As long as your history is correct then its all good.

    Theres 3 credit ref agencies lemders use, lenders can use just 1 or 2 or all 3 or even none at all but they would have to be daft to do that.
    • ChocolateLabOwner
    • By ChocolateLabOwner 15th Aug 19, 8:43 PM
    • 10 Posts
    • 2 Thanks
    ChocolateLabOwner
    • #6
    • 15th Aug 19, 8:43 PM
    • #6
    • 15th Aug 19, 8:43 PM
    But when i apply and get to the 'purpose' section, i chose consolidation, to tell them what its going to be used for.

    And the consolidation is more of a house tidying operation for me, to make 12 outgoing payments into one.

    This would be the biggest loan id have, and my history should all be fine.
    • BoGoF
    • By BoGoF 15th Aug 19, 8:47 PM
    • 5,134 Posts
    • 4,967 Thanks
    BoGoF
    • #7
    • 15th Aug 19, 8:47 PM
    • #7
    • 15th Aug 19, 8:47 PM
    But unfortunately for you no lender wants to take the risk that they will be the one that it all goes belly up. You have maxed out your borrowing options.

    Sorry, but in your situation you are not going to borrow your way of it. Your credit file essentially shows you need credit to get by.
    • zx81
    • By zx81 15th Aug 19, 8:49 PM
    • 23,562 Posts
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    zx81
    • #8
    • 15th Aug 19, 8:49 PM
    • #8
    • 15th Aug 19, 8:49 PM
    Your history isn't fine because of the debt you're carrying.

    You need to target the highest rate debt and start bringing it down.
    • ChocolateLabOwner
    • By ChocolateLabOwner 15th Aug 19, 9:03 PM
    • 10 Posts
    • 2 Thanks
    ChocolateLabOwner
    • #9
    • 15th Aug 19, 9:03 PM
    • #9
    • 15th Aug 19, 9:03 PM
    But i cant do that if were both spending all our money each month on multiple loans.

    I think what im trying to find is a way to explain all that to a lender, and make them see that the amount would still be the same, just easier to pay per month
    • BoGoF
    • By BoGoF 15th Aug 19, 9:09 PM
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    BoGoF
    They have heard it all before though.

    What is your income? How much is the total debt?

    Is there any equity in your property?
    • zx81
    • By zx81 15th Aug 19, 9:09 PM
    • 23,562 Posts
    • 26,169 Thanks
    zx81
    That's why you can't get a loan. You're spending all your money each month, so you can't afford any more credit.

    You need to cut your costs and start paying off. This is where the DFW board will help.

    You can't borrow your way out of debt. It's like handing a drowning man a bucket of water.
    • SnowTiger
    • By SnowTiger 15th Aug 19, 9:14 PM
    • 3,853 Posts
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    SnowTiger
    And if a credit rating is made up, why is it so bloody important to everyone?!
    Originally posted by ChocolateLabOwner
    It's not.

    Ask yourself why you're finding it difficult to get a loan if your credit rating is so good.

    Post a Statement of Affairs to the The Debt-Free Wannabe Board for others to comment on.

    Or talk to a free organisation that will give you advice about managing and repaying your debts. Stepchange for example.

    The problem with taking out loans to pay off loans is that the well eventually runs dry.
    • ChocolateLabOwner
    • By ChocolateLabOwner 15th Aug 19, 9:57 PM
    • 10 Posts
    • 2 Thanks
    ChocolateLabOwner
    Our total debt is 24,000. Between all the multiple payments its costs her around 800 a month and me 450.

    Ive been looking for 24,000 over 6 years(ish) and / or monthly payments of 350 each (saving us both money)

    I agree with the drowning man explanation, but i see it as a full replacement.

    Im not trying to get rid of my debt fast, Im just lost on how to make make my monthly payments easier
    • cymruchris
    • By cymruchris 15th Aug 19, 10:20 PM
    • 154 Posts
    • 91 Thanks
    cymruchris
    In terms of unsecured lending you're unlikely to get very far in your current circumstances, from what you've said so far. Someone asked above - is there any equity in your property? If for example the house was worth 150k, and you have a mortgage for 100k, there may be an opportunity to look at remortgaging - alternatively you'll have to sit down, and work out what you can reduce your spending on, and start working on reducing your balances through overpayments where possible.
    An ex-bankrupt on a journey of recovery. Feel free to send me a DM reference credit building credit cards from the usual suspects Happy to help others going through what I've been through!
    • ChocolateLabOwner
    • By ChocolateLabOwner 15th Aug 19, 10:37 PM
    • 10 Posts
    • 2 Thanks
    ChocolateLabOwner
    Ive only had my mortgage for 4 years. It was 95.500. Think i have 85.000 on it.

    Ive tried to cut back all our spending but its hard with 2 kids.

    Its getting to the point where i/we cannot afford to shop for food and im scared. Im failing my family because i cannot fix this, even tho 75% of the debt is my wifes i still see it as my duty to fix this
    • boo_star
    • By boo_star 16th Aug 19, 12:22 AM
    • 2,409 Posts
    • 1,770 Thanks
    boo_star
    Ive only had my mortgage for 4 years. It was 95.500. Think i have 85.000 on it.

    Ive tried to cut back all our spending but its hard with 2 kids.

    Its getting to the point where i/we cannot afford to shop for food and im scared. Im failing my family because i cannot fix this, even tho 75% of the debt is my wifes i still see it as my duty to fix this
    Originally posted by ChocolateLabOwner
    You haven't said how much you earn between the two of you but any financial institution would be looking at you not paying off the existing loans and offering based on roughly 50% of your combined salary as a maximum.

    You'd be looking at a joint income of 100k or thereabouts. Is that even close to what you're earning between the two of you?
    • ChocolateLabOwner
    • By ChocolateLabOwner 16th Aug 19, 5:51 AM
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    ChocolateLabOwner
    Apologies i meant to put that in my last post

    I get around 1900 a month and she gets around 1600
    • boo_star
    • By boo_star 16th Aug 19, 5:56 AM
    • 2,409 Posts
    • 1,770 Thanks
    boo_star
    Apologies i meant to put that in my last post

    I get around 1900 a month and she gets around 1600
    Originally posted by ChocolateLabOwner
    Then your current borrowing would be viewed as unsustainable, let alone how it would be viewed under a consolidation (basically double what you've borrowed now.)

    Probably best to go over to the Debt Free Wanabee and post your SOA.
    • MallyGirl
    • By MallyGirl 16th Aug 19, 6:19 AM
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    MallyGirl
    I'd suggest you stop thinking about 'me and her' and start thinking about being partners addressing a joint problem. You both should keep a spending diary to see where the money is going and should put together a joint budget with all your combined income and outgoings.
    Debt free wannabe is the place to get this under control - with direct debits in place and a simple spreadsheet it should not be that difficult to manage the multiple payments
    • Money maker
    • By Money maker 16th Aug 19, 6:41 AM
    • 5,205 Posts
    • 11,814 Thanks
    Money maker
    Probably a poor idea to put your wifes debt in your name. If she had spending problems prior to the marriage then a bit of a spree with PD loans, you clearing her balances would likely cause her to run it all up again unless the cause of these debts was tackled.
    Post your SOA on the debt free board, they can work magic figuring out where you're spending too much. I suspect even now that there is unaccounted money spent which doesn't pay loans or household bills. This is why a spending diary for every single penny will show you where it's going.
    Please do not quote spam as this enables it to 'live on' once the spam post is removed.

    If you quote me, don't forget the capital 'M'

    Declutterers of the world - unite!
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