Unhelpful bank

thebargee

My son has an overdrawn current account that is being charged £5 per day, a credit card to the limit (21.9% int) and two missed monthly payments, and a personal secured loan (10.9 int) that is paid up to date and a mortgage also paid up to date. Following loss of his job he gained new employed but at significant less salary subsquently that has put pressure on his ability to pay his debts.

He approached the bank for help. His target was to pay off his overdraft, reduce his loan and credit card interest, and reduce his monthly payments.

The bank only offered to consolidate his debt by incorporating everything into his mortgage. Being in negative equity that is fool hardy for both parties, also whilst total repayments reduce, the final amount of interest would increase.

The bank would not offer a new loan at a lower interest rate even though cheaper loans were available via the banks internet site.

The bank were not prepared to offer a settlement figure for either the loan or the credit card.

The banks representative said 'You signed up for the card and the loan, you should pay it all back, we are not a charity'.

I spoke to the bank on my sons behalf but to no effect, they are very unhelpful.

Any ideas?:mad:

michael1983l

Your son has recent missed payments and no disposable income. He will not get a loan at a high street bank but may get sub prime which could have an APR of 30%+. The bank will not offer him a loan at standard APR because he is a high risk and quite rightly so. The bank have been reasonable and offered to consolidate it into his mortgage, if I was him I would just accpet this as there isn't really any other sensible alternative. Rememeber the bank do not have to offer anything, like they said they are a abuisness and buisnesses make decisions based on risk.

ILW

I have to say, the bank seem to be being pretty reasonable. Unless the mortgage is at some horrendous sub prime rate.

vaporate

Reasonable? More like take it or leave it.

jonesMUFCforever

vaporate wrote: »

Reasonable? More like take it or leave it.

Which is the situation that OP 's son finds himself in.

He could always overpay when his financial situation improves.

thebargee

michael1983l wrote: »

Your son has recent missed payments and no disposable income. He will not get a loan at a high street bank but may get sub prime which could have an APR of 30%+. The bank will not offer him a loan at standard APR because he is a high risk and quite rightly so. The bank have been reasonable and offered to consolidate it into his mortgage, if I was him I would just accpet this as there isn't really any other sensible alternative. Rememeber the bank do not have to offer anything, like they said they are a abuisness and buisnesses make decisions based on risk.

My son, and the rest of our family, has been with this bank for over 15 years without any problems until very recently so how can the bank be said to be 'reasonable'.

Do you approve of encouraging negative equity? It is irresponsible lending by the banks that has helped this country get into such a disgraceful financial state and they are still perpetuating this situation.

Do you approve of paying more interest? Why does the bank not offer a cheaper loan to consolidate the debt, it is on offer to the public, why not to a loyal customer who has hit problems for the first time?

Beast

Cheaper loans are not on offer to the 'public', they are on offer to a particular cross section of customers who meet specific low risk criteria.

Tixy

Sounds like you son needs to seek advice from one of these people - http://forums.moneysavingexpert.com/showthread.html?t=2077631
and see what they suggest. Don't take out any further lending with the bank (loan or mortgage or otherwise) he will only be compunding the problem. It may be that a debt management plan in an option for him but one of those free advice organisations will be best to advised on his options and the implications.

Tamsin_Temrin

Banks dont care about loyalty - and you shouldnt either. Try changing to another bank (but not Santander!)

They can charge what interest they like for a new loan, there is no law saying they shouldnt.

It may be useful to go on to Debt Free Wannabe board, to see if they can look at your son's income/outgo and see if they can help him find savings, so he can afford his current outgoings.

Good luck.

thebargee

Thanks for the advice folks.

We have taken out a Credit Card 0% interest fixed for 16 months on balance transfers and money transfers. We've cleared his credit card, cleared his bank over draft and charges. My son will fully pay off the new card in the 16 month period.

My wife and I have paid off his loan and he will be paying us back plus the interest we would have had and we all know there is very little interest available for savers.

The bank is losing all my sons business and my wife and I are also moving our account.

Good luck to all of you.

thebargee

Beast wrote: »

Cheaper loans are not on offer to the 'public', they are on offer to a particular cross section of customers who meet specific low risk criteria.

Those that can afford it get low interest rates and those that cannot afford it get penalised even more!