Some basic advice from an ex CAB counseller

immoral_angeluk

Bardo_Pond wrote: »

I'd just like to briefly introduce myself: I'm a money advice worker employed by a CAB in Yorkshire. I have been dealing with clients in financial difficulties for 10 years and am concerned that an ex CAB "counsellor" has been posting information on this forum.

Debt advice has become far more complex in the last 12-18 months and no one should be obtaining debt advice from any individual who no longer currently works in debt advice with a free, confidential, impartial advice agency such as the CAB. This is because their knowledge base will be out of date and they do not have access to 'information sources' that the CAB MUST USE to give accurate advice to clients.

Please be careful when seeking advice.

Have to agree with this. It's only going to change in the coming months and years when the impact of the new government really sets in.

scholars13

Hello, I took out a Natwest loan back in 2003 for 25k to consolidate a previous loan and to cover credit card balances, however when calculating whether I could have the loan the staff member didnt include one of the card balances in her calculations. A fact she told me after that if she had then my application would have been rejected!!! At the time I was just glad it had been approved but looking back now if it had been rejected I wouldnt have got into further financial mess and faced up to my problems a lot lot sooner as I would have not been able to keep the repayments up for much longer!
Is this a case of negligence/incompetence on the banks part and what if anything can I do about it? Do I have any case for saying that due to this loan being approved they played a part in my financial mess being greater than it needed to be??? Natwest are now only getting a fraction of my monthly payment as im on a reduced payment plan with them and the credit card companies!

Any thoughts out there.......

THANKS

Bardo_Pond

Again, I would just reiterate my previous post. If you require advice on the area of debt/financial difficulties go to a reliable source such as your local CAB or look at their website adviceguide.org.uk

The Financial Ombudsman will be able to advise you on potential issues with being given this credit from NatWest. They can be contacted on 08000 234 567 or 0300 123 9 123
and they also have a website.

Please beware of people on these forums giving their own experiences or opinions - this is where many people get the incorrect information and we see this all the time at the CAB.

chesky369

I'm also a CAB adviser and agree with Bardo Pond - however it's not the original poster - Icebabe - who is at fault here. That information was posted here six years ago!! As we all know, six months is a long time in finances, let alone six years. I've noticed on several of these boards which get dragged up from many moons ago that the information is way out of date.

bigbaldy

Hello Ice,
I wonder if you could offer me any advice on the following?
I took a loan in january 2008 for 7k with Black Horse to purchase a new car. During protracted communications with the loan advisor over some 10 days, where I was asked to provide more information and paperwork several times, I had asked what the likely interest rate would be for the proposed loan. No answer was given,(as it would be the underwriters decision), yet the 'typical APR' advertised was 10.9%.
I was somewhat dismayed to be offered a rate of 26.5%, upon being summoned to Black Horses office. I was perfectly prepared to refuse this offer until the loan adviser told me that the rate was high because Black Horse had little information on me as a lender,(despite there being other active and up to date credit agreements on my credit file), and that provided my first six months payments were made on time, i could apply to have the loan refinanced at a preferential rate.
I had never heard of such an arrangement and asked her to reiterate this. She assured me that if my first six months payments were made on time and I applied to have the loan refinanced, it would be done at a better rate, as Black horse would now be confident of my ability to repay.
I asked what the preferential rate would be and was told it would be the typical APR, or similar to it.
Due to this and the option to pay lump sums into the loan account to reduce interest and loan term, I agreed and duly signed the paperwork.
Only a few days later, my own bank pre-approved me for up to 10k at 8.5% APR.
I considered cancelling the Black Horse agreement,(still within 14 days), but as bank interest would be front loaded,(no advantage to re-paying early), and the proposed reduction by Black Horse, I decided not to.
I made my first 9 months payments on time, (due to working away from home, it was difficult to do so sooner), and then contacted Black Horse to refinance the loan. I was then told that no such arrangement existed and that in order to reduce the payments, I would have to apply to borrow more money, over a longer period, but that there was no guarantee that this would reduce the amount of interest paid.
In short, it had become fully apparant that the initial loan arranger had lied to secure the deal,(and i suspect, her commision), and that I had now been tied into paying a high interest rate over a long period, which was never my intention.
Some six months later I approached Black Horse again to make an arrangement to refinance the loan, with the minimum additional amount, over the same period.
Despite having made all my payments on time, as the credit crunch had hit, lending policy had changed,(not my circumstances), and the early settlement figure on my existing loan, plus the minimum additional lend of £500, was now more than the maximum loan available.
I have now made 29 payments of £211.84, monthly, without fail, until a change in my circumstances, means i have missed the last three payments. In fact, the change in my circumstances occured in october last year, but I had kept pace with all my commitments until then with the sale of assets.
More recently, I have had to prioritise, and since in my opinion this loan was sold dishonestly, i have opted to keep pace with my other other commitments as a matter of neccessity; (mortgage, secured loan, credit card)

I have today recieved a default notice from Black Horse demanding the overdue payments in 2 weeks before issuing a demand for full repayment and court action.

How should I tackle them in respect of the above?
Do i have a legal leg to stand on?
I am hoping to recieve a lump sum soon, having obtained judgement against an individual who owes me a considerable amount of money, could I negotiate a reduced settlement with Black Horse?

Any ideas greatly appreciated.........

cyprus4me

The Gnat West are a right bunch! I'd write to the Guardian newspaper, Capital Letters, they'll make Nat West sit up and listen I guess :-)

pig_watts

I am concerned that no where in Money market pages do you mention the strong role that Credit Unions play in trying to help people in a difficult area. The less than £5k loan market.
Members are encouraged to manage their money carefully and save regularly.
They then can obtain small loans(up to £3k) at rates from 1% per month on reducing balance, to 2% per month on the reducing balance. APRs quoted are 12.68% and 26,68% respectively. However APRs can be as confusing as there are 3 basic types of APR quoted.
Credit Unions are flexible and friendly and are local. Check out your local one at the local Library.

Tomasdeil001

Hello Sir,
You are very knowledgeable person and thank you very much for sharing such an useful article with us. I will be grateful to you.:T

[Deleted User]

Mortgage_Master wrote: »

Great post Ice,

I was just wondering if you could please tell me what the CAB's views are of restructuring short/medium unsecured debt to long term secured?

How do you determine if it's better to consolidate all your debts by remortgaging or negociate with creditor for reduced payments, suspended interest?

Thanks

Since we got married we have always taken the maximum mortgage that was available for my salary. Because it was secured against our house the interest rate was much lower than any unsecured credit. This enabled us to completely avoid interest on loans, purchasing cars, caravans, furniture with cash. In this way we got bargains.

As the kids grew up we moved to houses always at the same price as the one we were selling. Because we had initially invested in a big house and worked hard to improve it we benefited later from its increase in value.Over the years my salary increased so we increased our mortgage each time. This released more funds which we put in a savings account earning high interest or purchased unit trusts. We never used this cash for short term things such as holidays and entertainment.
We use the same principle as a business: Borrow in order to make money, not fritter it away. Watch the market and invest for the long term. Buy for cash and keep it until it wears out. We ran our motorcaravan for 13 years and it saved us a fortune in package holidays.

essleweb

Thank you for your great article! It has been extremely useful.