Getting a loan after paying a large amount of debt

Calmfab · 13 March 2018 at 2:58PM

Hi there,

I hope you can help me and that I can make myself understood My husband and I are 26 K in debts. One close family member kindly/generously agreed to give us 10 k to help us out. In order to repay the leftover debts, we would like to get a loan. My husband credit score is really good and he was told that he was eligible for some loans however when he applied he got rejected. My question is : is it better to get the 10 K and put it towards the debts then apply for a loan ? Thank you.

[Deleted User] · 13 March 2018 at 3:01PM

Your husband's score is meaningless. Lenders will look at your history and debt, in relation to your income.

Unless your income is very sizeable, you should be looking to pay down some of your debt before borrowing more.

thriftylass · 13 March 2018 at 3:05PM

It's never a good idea to get a loan to pay off debt. It rarely works. How was the debt generated, can you sell any of it to pay it off.......
It would be better to look into reducing the interest rates on the existing debt, for instance if any is on CC could you transfer to a 0% card? Also look into snowballing (i.e. paying off the highest interest rate debt first, once paid put all those payments towards the next highest interest rate). Do you also need to pay back the 10 from the family member. What arrangement have you made with them.

Best also to post and SOA and list your debt and interest and someone more knowledgeable will be along with more advice. I agree the score doesn't mean anything. You probably just already have a high debt to income ratio.

Calmfab · 13 March 2018 at 3:09PM

The 10 K are a gift. We bring 6 k after tax. Thank you for your help

Candyapple · 13 March 2018 at 3:26PM

Please list all your credit card limits along with outstanding balances.

Please list all your partner's credit card limits along with outstanding balances.

Do you have any other loans / overdraft / car finance etc?

Does your partner have any other loans / overdraft / car finance etc?

Do you have any late payments / defaults / CCJs?

Does your partner have any late payments / defaults / CCJs?

What is your annual salary?

What is your partner's annual salary?

Do you have a joint bank account / mortgage?

iolanthe07 · 13 March 2018 at 3:50PM

Calmfab wrote: »

The 10 K are a gift. We bring 6 k after tax. Thank you for your help

So your outstanding debt is £16K. With a take home income of £6K a month you should be able to crack this in a short time, but as other have said, an SOA will help people give advice.

MEM62 · 13 March 2018 at 4:36PM

Calmfab wrote: »

In order to repay the leftover debts, we would like to get a loan.

This would not repay your debts, it would just shift them.

Calmfab wrote: »

My husband credit score is really good

Unless that assessment comes from a lender it is of little value.

Calmfab wrote: »

We bring 6 k after tax. Thank you for your help

Monthly? If so why are having issues addressing your debt. You should be able to clear this relatively quickly even without a hand out from family. Posting an SOA will get you some useful feedback.

System · 13 March 2018 at 5:55PM

If you take home £6k a month after tax a better idea would be to stop spending money on crap, spend only on essentials and by that I mean real essentials not just what you consider to be essential - for example you'll have no need to buy any clothes or shoes any time soon, a meal and a night out is not an essential - and you could easily repay this without a loan in a matter of months.

John-K_3 · 16 March 2018 at 8:01AM

Calmfab wrote: »

Hi there,

I hope you can help me and that I can make myself understood My husband and I are 26 K in debts. One close family member kindly/generously agreed to give us 10 k to help us out. In order to repay the leftover debts, we would like to get a loan. My husband credit score is really good and he was told that he was eligible for some loans however when he applied he got rejected. My question is : is it better to get the 10 K and put it towards the debts then apply for a loan ? Thank you.

Why do you want to shuffle your debts around like this? You write as though after taking out the loan your debts will be gone, but of course they will not be, you will just have changed the lender.

What is the point in doing that?

John-K_3 · 16 March 2018 at 8:05AM

MEM62 wrote: »

Monthly? If so why are having issues addressing your debt. You should be able to clear this relatively quickly even without a hand out from family. Posting an SOA will get you some useful feedback.

That does not follow at all, it all depends on outgoings.

My mortgage and the service charge on my building alone come to more than the OPs take-home pay, leaving nothing at all to live off.

OP, you clearly are spending an awful lot of money on something, what is it all going on? This is what you need to address, shuffling debts is unlikely to fix anything.

Dobbibill · 16 March 2018 at 9:26AM

Hi OP,

You are in a very fortunate position having been gifted £10k.

Don't move the rest of the debt - it isn't paying it off.

Fill in a SOA and post it up. (click on format for MSE - then paste)

With your income you should be able to make some inroads to the debt and get a plan in place. The SOA will give you a better idea of how much but make sure you are honest with yourself - if you spend £100 a month on coffees with mates don't try and kid yourself that it's only £20

Getting a loan after paying a large amount of debt

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