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  • FIRST POST
    • pinkness86
    • By pinkness86 13th Jun 17, 8:12 PM
    • 5Posts
    • 0Thanks
    pinkness86
    Personal Loan and Working for a Bank
    • #1
    • 13th Jun 17, 8:12 PM
    Personal Loan and Working for a Bank 13th Jun 17 at 8:12 PM
    Hi Everyone,

    I'm in a really difficult situation and i just wondered if someone can give me some advice.

    I have worked for a bank for 10 years this year. A few years after joining i stupidly stopped paying a few debts and i defaulted on them. These have been on my credit file ever since and have prevented me from obtaining any decent credit. Over a period of 7 years i have got myself into a huge mess and now have debts totaling around £20k. This consists of a few high interest loans and credit cards.

    I contacted experian recently and they have informed me that my last default drops off my file in November this year. I am then planning on booking an appointment at my local branch and applying for a staff loan which will be for debt consolidation only. I know this is more debt, however it will be a much lower interest rate and i will just have one payment each month.

    Has anyone here worked for a bank and had a problem like this? I'm hoping that if the loan gets declined that they will still consider me as i'm in financial difficulty. If it does get declined then i will have to go down the IVA/Debt Management Plan route, but i'm worried i will lose my job if i enter into any of these. I don't work as a financial advisor i just have an office job but it still worries me. Any help and advice would be greatly appreciated.
Page 1
    • DCFC79
    • By DCFC79 13th Jun 17, 8:16 PM
    • 29,353 Posts
    • 18,559 Thanks
    DCFC79
    • #2
    • 13th Jun 17, 8:16 PM
    • #2
    • 13th Jun 17, 8:16 PM
    Has the root cause of the debts been resolved ? If not whats to stop it coming back.

    How do you know it will be a lower interest rate ?

    Do you have a budget and stick to it ?

    Id consider posting on the dfw board.
    Je Suis Charlie
    • pinkness86
    • By pinkness86 13th Jun 17, 8:21 PM
    • 5 Posts
    • 0 Thanks
    pinkness86
    • #3
    • 13th Jun 17, 8:21 PM
    • #3
    • 13th Jun 17, 8:21 PM
    Has the root cause of the debts been resolved ? If not whats to stop it coming back.

    How do you know it will be a lower interest rate ?

    Do you have a budget and stick to it ?

    Id consider posting on the dfw board.
    Originally posted by DCFC79
    I have just taken out debt and then tried to consolidate it and it has just built up more and more as i have stupidly taken out more debt. I have learnt my lesson and now i'm older i am definatley wiser. I just want it all in one loan without it seriously affecting my credit score for the next six years.

    It will be a staff loan so i get a staff rate which is around 8%.

    I have been on a budget for a long time now. It's very difficult at times though as i don't have much left each month after i've paid everything out.
    • jonesMUFCforever
    • By jonesMUFCforever 13th Jun 17, 8:45 PM
    • 23,746 Posts
    • 10,974 Thanks
    jonesMUFCforever
    • #4
    • 13th Jun 17, 8:45 PM
    • #4
    • 13th Jun 17, 8:45 PM
    The staff loan also means beneficial loans tax.
    You need to work this out calculating the interest on the loan for 12 months minus the HMRC 's official rate (I think its 3% at present).
    You will get taxed at 20% on the difference.
    This is normally done through your tax code so your take home may reduce from next year onwards.

    Be careful these days any excuse for getting rid of staff they wil take.
    What goes around - comes around
    give lots and you will always receive lots
    • Nearlyold
    • By Nearlyold 13th Jun 17, 9:31 PM
    • 869 Posts
    • 698 Thanks
    Nearlyold
    • #5
    • 13th Jun 17, 9:31 PM
    • #5
    • 13th Jun 17, 9:31 PM
    The staff loan also means beneficial loans tax.
    You need to work this out calculating the interest on the loan for 12 months minus the HMRC 's official rate (I think its 3% at present).
    You will get taxed at 20% on the difference.
    This is normally done through your tax code so your take home may reduce from next year onwards.
    You don't deduct the HMRC official rate from the staff rate - its the other way round - other wise the higher the rate the bank were charging the more tax you'd pay - which would be a bit bizarre. The OP mentions being charged 8% in which case there will be no tax to pay as that rate is higher than the HMRC official rate.
    Last edited by Nearlyold; 13-06-2017 at 9:35 PM.
    • pinkness86
    • By pinkness86 13th Jun 17, 10:19 PM
    • 5 Posts
    • 0 Thanks
    pinkness86
    • #6
    • 13th Jun 17, 10:19 PM
    • #6
    • 13th Jun 17, 10:19 PM
    Sorry but i'm really confused with all this HMRC stuff. As far as i'm aware it's just the same as a normal personal loan but we get offered a preferential rate as we are staff.
    • PeacefulWaters
    • By PeacefulWaters 13th Jun 17, 11:34 PM
    • 6,394 Posts
    • 7,837 Thanks
    PeacefulWaters
    • #7
    • 13th Jun 17, 11:34 PM
    • #7
    • 13th Jun 17, 11:34 PM
    Sorry but i'm really confused with all this HMRC stuff. As far as i'm aware it's just the same as a normal personal loan but we get offered a preferential rate as we are staff.
    Originally posted by pinkness86
    It's only an issue if your preferential rate is below 3.5%.
    • enthusiasticsaver
    • By enthusiasticsaver 13th Jun 17, 11:47 PM
    • 3,552 Posts
    • 6,196 Thanks
    enthusiasticsaver
    • #8
    • 13th Jun 17, 11:47 PM
    • #8
    • 13th Jun 17, 11:47 PM
    Many people have gone down the debt consolidation route and it almost never works out. You said you have done it before and it hasn't worked. Why would it work now when you will also have an extra loan payment?
    Debt and mortgage free and saving for early retirement
    • Pixie5740
    • By Pixie5740 14th Jun 17, 7:37 AM
    • 10,393 Posts
    • 14,234 Thanks
    Pixie5740
    • #9
    • 14th Jun 17, 7:37 AM
    • #9
    • 14th Jun 17, 7:37 AM
    8% isn't a particularly good rate and I'll never understand the fascination with only having a single monthly payment to make that everyone who posts about consolidation has.

    Have you tied plugging the numbers into a snowball calculator to find out if snowballing is less expensive than consolidating?

    You've said that you've made a budget and been sticking to it. During that time has your debt increased or decreased? Perhaps you could post your Statement of Affairs on the Debt Free Wannabe board for ideas on how to improve your budget.

    http://www.stoozing.com/calculator/soa.php

    I do know someone who worked at a bank and had an IVA. That was around 12 years ago though. An IVA is a formal agreement which means you are insolvent wheras a Debt Management Plan is an informal agreement between you and your creditors. Is there anyone you can talk to in confidence where you work or does the staff handbook say anything about debt or insolvency?
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • mcpitman
    • By mcpitman 14th Jun 17, 8:03 AM
    • 475 Posts
    • 299 Thanks
    mcpitman

    Be careful these days any excuse for getting rid of staff they wil take.
    Originally posted by jonesMUFCforever

    Sweeping statement alert!
    Life isn't about the number of breaths we take, but the moments that take our breath away. Like choking....
    • Candyapple
    • By Candyapple 14th Jun 17, 10:08 AM
    • 2,059 Posts
    • 1,598 Thanks
    Candyapple
    Hi Everyone,

    I'm in a really difficult situation and i just wondered if someone can give me some advice.

    I have worked for a bank for 10 years this year. A few years after joining i stupidly stopped paying a few debts and i defaulted on them. These have been on my credit file ever since and have prevented me from obtaining any decent credit. Over a period of 7 years i have got myself into a huge mess and now have debts totaling around £20k. This consists of a few high interest loans and credit cards.
    Originally posted by pinkness86
    First of all, you need to check all 3 credit reference agencies because the data may be different on each.

    The free versions to check your credit files are below:
    Experian: www.moneysavingexpert.com/creditclub
    Equifax: www.clearscore.com
    Call Credit: www.noddle.co.uk

    Please answer all questions below and then we can offer further advice.

    1. How many defaults in total do you have and what are the dates of the them?

    2. Please list all credit card limits along with any outstanding balances and also the names of the card providers.

    3. Same goes for above but this time with any loans / car finance etc.

    4. Do you have any late payment markers / CCJs?

    5. Are you on the electoral roll (does it show on all 3 files?)

    6. Do you have any other closed / settled accounts in your history?

    7. Do you have many other 'credit' accounts showing on your files such as bank account / mobile phone etc.?

    8. Have you made any credit applications in the last 12 months?

    9. What is your annual salary?

    10. What is the likely APR you would get for a staff loan? Is there a maximum amount you can apply for? And for how many years will you be wanting to pay it off?
    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
    • Summer17
    • By Summer17 14th Jun 17, 11:09 AM
    • 212 Posts
    • 43 Thanks
    Summer17
    8% on 20k. I took the same out with sainburys at 3.8%. I also went to my bank 1st they wanted to charge me 6.7%!! Banks are rip off for loans. As they say above, i was once in debt and keep getting loan to consolidate. 4 times i did it went from 9k to 16k. I does not work. Paying of as much as you can and reduce household bills etc helps i am now debt free for 3 years and never been so happy. It now easier to walk away from buying things you dont really need/
    • sourcrates
    • By sourcrates 14th Jun 17, 1:09 PM
    • 10,899 Posts
    • 10,561 Thanks
    sourcrates
    Oh dear, please don't consolidate again !!

    It does not work, stop the rot now and get some debt management advice.

    Otherwise you will be back here in 12 months 40k in debt asking the same questions.

    Stepchange can help you manage your existing debt, and advise on how to get interest stopped.

    That should be your mindset now, not more borrowing.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • Brock_and_Roll
    • By Brock_and_Roll 14th Jun 17, 4:09 PM
    • 743 Posts
    • 708 Thanks
    Brock_and_Roll
    Hang on a second here......


    The OP works for a bank. Almost certainly bankruptcy, IVA, even defaulting on debts may well be a breach of terms of employment.


    I looks like the OPs record was clear when they joined and as any defaults have happened subsequently they have not found out.


    Surely there is a big risk that in attempting to take out a loan with your employer, they will look a the credit file with potentially serious consequences.


    So aside from the fact that consolidation is highly unlikely to be the best option, in this case using a staff loan might be a very bad idea.


    Far better to get a few shifts in the pub etc and snowball the debts.
    • pinkness86
    • By pinkness86 14th Jun 17, 9:18 PM
    • 5 Posts
    • 0 Thanks
    pinkness86
    It's only an issue if your preferential rate is below 3.5%.
    Originally posted by PeacefulWaters
    I got told today by branch staff that the loan would be 3.3% for staff. Why is that an issue?

    I have never been offered a loan with such a low interest rate so the monthly payment would be very manageable for me. I have learnt my lesson and i know people say that but i know i will never be in a position like this ever again, i wouldn't wish it on my worst enemy.

    If the loan gets declined then i will have to look at getting some debt help. I think i would be ok with a debt management plan but not an IVA as i could risk losing my job.

    Thanks for all your help everyone. I appreciate you saying not to get into more debt but as it's a very low rate and it's with my bank and my employer i won't want to mess it up if i get accepted. I will check with all the credit reference agencies before i apply to make sure all the information is correct.
    • retepetsir
    • By retepetsir 16th Jun 17, 12:03 PM
    • 1,099 Posts
    • 933 Thanks
    retepetsir
    Don't do it. Have you completed an SOA?

    The Great Declutter Challenge - £876
    ------------------------
    • meer53
    • By meer53 16th Jun 17, 2:46 PM
    • 8,734 Posts
    • 12,680 Thanks
    meer53
    I work for a bank, IVA/DMP is OK where i work but Bankruptcy means losing your job. From experience i would say you will be declined for a staff loan, consolidation is not normally offered unless it's to pay off debt owed to your employer where they can guarantee that you'll use the loan to repay and not spend it all again. They might offer a loan at a much higher interest rate but you'll need to have a conversation with them first.
    • Chloe L
    • By Chloe L 18th Jun 17, 10:53 PM
    • 11 Posts
    • 2 Thanks
    Chloe L
    I got told today by branch staff that the loan would be 3.3% for staff. Why is that an issue?

    I have never been offered a loan with such a low interest rate so the monthly payment would be very manageable for me. I have learnt my lesson and i know people say that but i know i will never be in a position like this ever again, i wouldn't wish it on my worst enemy.

    If the loan gets declined then i will have to look at getting some debt help. I think i would be ok with a debt management plan but not an IVA as i could risk losing my job.

    Thanks for all your help everyone. I appreciate you saying not to get into more debt but as it's a very low rate and it's with my bank and my employer i won't want to mess it up if i get accepted. I will check with all the credit reference agencies before i apply to make sure all the information is correct.
    Originally posted by pinkness86
    My understanding is if it's below the HMRC rate (as someone else pointed out to be 3.5%) then you will have benefit in kind implications, which means a slight reduction to your take home pay.
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