offer of: managed loan..confused

2nd_time_around

If anyone out there could help to advise me on this I might be able to sleep at some point tonight. HSBC phoned me this morning saying that they were willing to offer me a 'managed debt' to cover what I owe them £19,484 I think they said it would be over 12 years, the interest would be 7% above base rate and Iv actually forgotten what the monthly payment would be (so much going around in my head at the mo). The break down of what I owe them is: Flexi loan:£4520 16.5%
Personal :£6162 8.9% overdraft: £1000 ? credit card:£7802 11.9%

The questions I have are: What is a Managed Loan does it mean it has a charge on my home/mortgage? is 7% above base high because if it goes up some time soon its going to be extortionate OR am I wrong?

Happytogetdebtfree

Good morning I didn't want to read and run. Hopefully someone can answer your question. How long before the loans end now? Can you afford the payments? Have you thought about putting up a monthly soa so people can look where you can save. 12 years seems along time to me circumstances change and you maybe able to clear your debt in less time with some tweaking of soa etc. Chin up and hope someone can enlighten the term managed loan. X x

impetus

I have been offered loans too by a company linked through MBNA - the bloke was adamant that it was the best solution, it would get my finances back on track etc and be secured on the house....most advice would be to look at it very carefully and does it actually increase your debt? Usual advice then is don't touch it with a barge pole, taking on more credit is a downward spiral as most on here would testify. Anyway I am sure more experienced DFWs can provide more help. Good luck.

gilligansyle

HSBC used to do these a lot, if you search on the forums you will find all sorts of threads.
Basically its consolidating all your borrowing from HSBC into what they think is manageable. You need to work out exactly what your income and expenditure is, there is a Statement of Affairs tool as a sticky on the top of the board. Somewhere there is also a repayment calculator that will show you how long it will take you to pay everything off, you then need to compare this with what HSBC are offering.

Generally speaking a consolidation loan is not the answer, it may be better to concentrate on paying things with a higher APR first and then throw that money at something else.
Someone more knowledgeable will be able to advise better on this.

Nargleblast

If it is any help, I used to have a debt management plan (DMP) with CCCS, and when HSBC offered to consolidate my borrowing into a managed loan CCCS advised me not to accept it. Their reason was that in a DMP you pay monthly an agreed affordable sum which is split amongst all your creditors pro rata. The debts will only start reducing if all creditors stop adding on charges and interest. With a managed loan HSBC still reserve the right to add charges and interest, and to change any of the terms and conditions at any time, so you would not benefit. Of course, if you are not already in a DMP then this will not be relevant, and you should treat the managed loan offer just as any other offer to consolidate your debts. Make sure it is affordable and that you will not run up any more debts during the life of the loan.

MadWomble_2

It is not advisable to turn unsecured debt into secured debt, and most of the advice on these forums seems to be that consolidation is not the answer.

Have you had a run through the snowball calculator to try and prioritise your outstanding debts? Another thing would be to post your SOA (Statement of affairs), listing income vs outcome so the helpful folks here can point out areas where you could perhaps make more savings, and increase any repayments.

Have a look in the stickies for links to the above. Sure more helpful folks will be along soon too.

Ames

I've heard horror stories about managed loans, I remember one guy was paying £62 a month, and only £2 was coming off his debt!

Tixy

HSBC Managed Loans are not secured loans

The are a consolidation loan and mostly they are advised against on here (as someone else says if you do a search you will find all sorts of bad experiences). 7% above base is a high rate for an unsecured personal loan (not that high at the moment but high when we return to a more typical base rate - which it will long before your 12 years are up).

And whilst I can't recall exactly how they work I know people have ended up paying their managed loans for far longer than they were originally told they would.

I'd advise you to steer well clear.

cakey

i have a managed loan with hsbc. i currently pay 9% over the base rate. Appox 108 monthly payments and 15 is taken off for interest. they are good if you are happy to lose your Maestro card and go onto solo. Its a condition of having hte loan. it will appear of your credit file that it is a managed loan, but i have had mine since 06 and dont have any major problems with my credit file

2nd_time_around

Hi thanks for the responces everyone, I have tried to put my SOA on here but am not terribly good with computers will try again later. But here is what has happened today; The debt recovery agency who are handling my service/ground rent arrears have asked me to sign a release allowing them to talk to my mortgage company(HSBC) in order to get the debt put on to my mortgage.....this sounds good to me, or am I just being naieve?

Ames

I think they're talking about a charge on your property, which in theory could give them the right to repossess. It's never a good idea to secure debt as it puts your home at risk.