I have credit card debt and want a loan to pay them off. Any hope?

Posted on 5 March 2014 by Marie


I have credit card debt and want a loan to pay them off. Any hope?

I have a property worth £390,000 with a £288,000 mortgage. I earn £68,000 but have credit card debts of £25,000 and I want to get a loan to pay them off. Lloyds, my own bank have turned me down. I've always made my payments give or take the off two days late. Any hope here?

Marie,

As long as you don't have have any actual missed payments, then I would like to think this is a doable case. As we approach the implentation on the Mortgage Market Review (MMR) in April, lenders (and especially those major high street ones) are going to be getting even more nervous than usual about debt consiolidation cases.

One of their biggest concerns lenders currently have, is the "what if the borrower then goes out and racks up the unsecured debt again?" This is one reason why many lenders are rejecting debt consolidation over 75% loan to value, and others factor into their affordability calculator's that the borrower doesn't pay off all or part of the debts.

Where the new LTV is over 80% lenders are obviously concerned of the possible consequences if a borrower should run up significant levels of unsecured debt again, then this time they'll be unable to remortgage to consolidate until such time as they've built up sufficient equity to meet criteria. So they tend to shy away from these scenarios. Another option could be to look at leaving your exiting mortgage where it is and look at a second charge loan.

If you'd like to discuss your options in more detail, then please contact one of our consultants on 0344 346 3672 and they'll be able to give you an idea of how we can help.

Regards,

Simon

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