personal loan declined- why?

K

kittykat1980

Guest
Hi,


Please let me know if anyone can think of why a personal loan would have been refused, with the following facts:

Asked for a loan for 12,000 for Debt Consolidation.
5K on credit card
3K on credit card
2K on overdraft
2K on education loan (starting masters soon)

I was approved in principal, and asked for documents, which I provided- bank statements, credit card statements etc.
Sent them all off.

The loan repayment would have been 290 a month over 4 years, and including a car loan (2 years left) and mortgage+household bills, my wages of 2600 a month minus this personal loan plus all other outgoings would leave me with 900 a month disposable income. so wanted to start with a clean slate and 900 is more than enough for me to live off and start some savings (I have no savings at this moment, as all my spare cash goes on credit card payments, which scares me).

All evidence of this included with my documentation sended to lender.

Lender states they sent a letter confirming why I have now been declined in post, but I haven’t received it. they can’t give reason over the phone. I have asked for letter to be reissued but they said they have to wait for non-receipt by post for 2weeks.

To be honest I’d just like some feedback now on why this could have happened, thought I was doing the sensible thing by covering all loans plus the exorbitant interest rates I am paying into one easy sum a month? Also stretched it over 4 years to avoid over-extending my monthly paycheck, even though I pay more for credit over a longer period. Is there any point in reapplying to another bank?


Any thoughts? Much appreciated.
 
Had a similar situation to you K reality is banks underwriting criteria is ludicrously strict due to the bad debts being incurred. Not much point applying to another bank.

To be honest given you were planning on saving in addition to this why not put the money you wanted to save into your credit cards? They're the part that is probably killing you so try and get those paid. Maybe transfer your €3k one to a 0% for 12 months?
 
bigbadostric said:
Maybe transfer your €3k one to a 0% for 12 months?
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Might not be a bad plan! MBNA and Ryanair offering sweet enough deals in regard to transfers for 9 or 12 months. Although do take note of the interest after this period as its steep in comparison to other cards.

Have you tried your local credit union? Worth a look also.

Lose the 2 credit cards as a first step. Good luck.
 
Lending to people looking to consolidate existing loans is a no no at the moment.

Look at it from the lenders viewpoint; if you are looking to consolidate, its fair to assume you are having trouble meeting repayments. If you are having trouble meeting repayments now, what kind of a risk are you if interest rayes increase?
 
OP have you only been paying your credit card with a minimum payment? How much is your mortgage. Is the car loan in addition to the debt you have listed? I recommend you do the money makeover section.
 
7seats said:
Lending to people looking to consolidate existing loans is a no no at the moment.
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7seats said:
Not sure this is strictly true, I was contacted out of the blue last Friday by BoI and asked if I was interested in consolidating my existing debts, I called in to the bank this Tuesday and signed off on forms today (Thursday). Debts were 3k on CC, 9k personal loan and 2k OD from a salary of approx 48k. Just doing the maths now and I reckon this puts at least a couple of hundred back in my pocket per month...... Reduction of the OD limit and CC limit to 1k each was a condition of the loan.

Nutsy
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Nutsy,
Were the loan, Credit card and Overdraft all with BOI?

What I had heard (anecdotally from people in the industry) was that Banks are not keen on applications to consolidate loans from 3rd parties. Example, borrowing 20 k from AIB to pay off existing loans from MNBA, Car finance, credit union etc).

Either way, theres no doubt restrictions are tighter than they have been historically...thank God
 
7seats said:
Nutsy,
Were the loan, Credit card and Overdraft all with BOI?

yes, all with BoI. I agree with you about the need for things to tighten up, I know that I for one definitely lost the run of myself there for awhile in the 'boom', tbh I was just glad to get the opportunity to consolidate and start with a relatively clean slate. CC going in the cupboard, OD for emergencies etc, I used to live like that once.........:)
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