Loan APR

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nis11
nis11 Posts: 8 Forumite
in Loans
Hello,

I`d like to apply for a loan about £20-25000.
Currently I`m using:
- my bank account overdraft, balance: £1100 out of £2250
- 3 credit cards, balances: £1800 out of £2200, £2600 out of £3700 and £5800 out of £7200
I`ve checked my credit report and it shows that my credit score is 774. Also it says that "my depth compare with my annual income is quite high" and "I`m using quite a bit of the credit available to me".

Last week I went my bank Natwest and ask them a quote for a £25000 loan for 5 years. The quote came up with a 11.9% APR offer.
In the next few weeks I possible get an extra £3000, which I can use to reduce my depths. Will it make any difference on my credit score and a new loan offer APR and if yes how later should I try to get a new quote?

Thank you in advance for any info.
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  • davidwood123
    davidwood123 Posts: 471 Forumite
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    What do you earn?
  • nis11
    nis11 Posts: 8 Forumite
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    About £15000 / year
  • Candyapple
    Candyapple Posts: 3,384 Forumite
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    £15K a year salary with £11.3k debt and you want to take out an additional £20-25k of debt?!

    Ignore your credit score, it's just a marketing tool.

    Even if you wipe off £3k from your total debts, you would still owe over half your annual salary on debts (£8.3k). Although note, if you paid the £3k off your debts, you would need to wait at least 2, possibly 3 months minimum for the balance to be updated and info relayed back to all 3 credit reference agencies.

    Of course the lower your debt is the better chance you have of being accepted, try entering your details here:
    https://www.moneysavingexpert.com/eligibility/loans-calculator/
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
  • nis11
    nis11 Posts: 8 Forumite
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    Obviously some part of the loan would go to pay off the whole depth.

    Would you advise to go for this 11.9% APR offer?

    Possible I will just try to get about £15000 - 20000.
  • Candyapple
    Candyapple Posts: 3,384 Forumite
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    nis11 wrote: »
    Obviously some part of the loan would go to pay off the whole depth.

    Would you advise to go for this 11.9% APR offer?

    Possible I will just try to get about £15000 - 20000.

    It's debts, not depth.

    So this will be a consolidation loan? Those are generally never a good idea because you never tackle the root cause of what caused the debts in the first place.

    I would suggest writing your statement of affairs and posting it over on the DFW boards for advice:
    http://www.stoozing.com/calculator/soa.php
    http://forums.moneysavingexpert.com/forumdisplay.php?f=76

    I know you mentioned the rate of 11.9%, note that this is just a quote and a full hard credit search would need to be done first and I imagine that once Natwest did that, you would either be declined full stop or the rate would increase drastically to something silly.
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
  • davidwood123
    davidwood123 Posts: 471 Forumite
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    In my opinion you won't get a loan
  • PeacefulWaters
    PeacefulWaters Posts: 8,495 Forumite
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    What are you doing to kick your overspending habit and reliance on debt?
  • DCFC79
    DCFC79 Posts: 40,598 Forumite
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    edited 4 July 2017 at 3:11PM
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    nis11 wrote: »
    Obviously some part of the loan would go to pay off the whole depth.

    Would you advise to go for this 11.9% APR offer?

    Possible I will just try to get about £15000 - 20000.

    If you were to get the new loan whats to stop you splurging the 15k/20k on a new car, a holiday, expensive clothes. Theres no guarantee you would use it to pay off the loan,

    I dont see you will be successful.
  • System
    System Posts: 178,094 Community Admin
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    Not a cat in hell's chance. Even at a low APR of 2.9% repayments over 60 months are going to be at least £450. Your take home is just over £1100 so the repayments would be 40% of your take home pay so you have absolutely no chance in hell of passing an affordability test.

    And that is before existing borrowing is taken into account because it will be due to the high number of people who get consolidation loans only to not pay the stuff off or re-use the freed up credit to dig a bigger hole.
  • Mobeer
    Mobeer Posts: 1,851 Forumite
    Academoney Grad First Anniversary Photogenic First Post
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    If you do get that 3k, use it to pay off the overdraft and part of the balance on the highest APR credit card. Then work on paying off the remaining credit card debt.

    Once that's done, then consider whether you want to get back into debt again.
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