Can the bank force me into a consolidation loan?

helpneed_2

Hi all, I am in a bit of a situation and would appriciate any advice on offer..
Background
I have a couple of loans with Natwest for which I took out PPI on when I agreed them, in late 2009 I lost my job through a forced resignation and under the terms of a comprimise agreement. RBS refused my PPI claim despite being approved for Job seekers ect, after much hassle I managed to get a reimbursment of my PPI premiums and a reduction on the loan amounts. I also have an overdraft on my current account there with an outstanding amount.
I have since had to go self-employed due to no employed positions available and am building up my business and earnings gradually, in addition I have opened an account elsewhere for my day to day banking.

My problem
I have tried to negociate a re-payment plan with Natwest who did not want to discuss anything but a consolidation loan, as I have already paid the interest off on my existing loans I am reluctant to pay an additional 4k in interest on the same borrowings again.
Can the bank force this? I was told that they would mark it as defaulted and the bailiffs would be called in if I did not. As the PPi re-imbursment has been credited to me can I not ask them to use that as payment of the missed re-payments and clearing of the overdraft? The charges that they are applying have mounted up to a significant sum and is making the situation much worse in catching up. Is this ethically right? NO but is there anything within regulations that can help me?
Please help as this is making me quite ill with worry... Thank you very much

yorkshire-lad

The bank cannot force you into taking a consolidation loan,you can say no and just don't sign anything.

You say you was credited the ppi? Where did this money go?
Can you post up some figures to help?

Hax

From the banks point of view, they'll be reluctant to let you repay their money over a longer period when there's nothing in it for them.

They can't force you to accept a consolidation loan - but if you have fallen behind on your current loan(s), then they are well within their rights to default you on it/them.

If that happens, then the debt(s) will be passed on to either their internal collections team or an external debt collection agent. At this point, there will be more scope for negotiating a repayment plan. However, your credit file will be trashed for the next six years.

If you were able to negotiate a payment plan with Natwest, then there is still the possibility for your credit files to be trashed with "arrangement to pay" markers - which again indicate to other lenders that you have struggled with your financial commitments in the past.

Have you checked how these accounts are currently being reported with the CRAs? They may already be in default.

If you have the money to bring the accounts up to date, then that should stop them from marking them as being in default. Once that's done, can you afford to maintain the "normal" repayment schedule?

As for the charges, unfortunately, there has to be some penalty for people who fail to maintain their payments. I know you bought PPI but that never covers you for voluntarily leaving a job (and resignation is counted as voluntary - regardless of the circumstances surrounding it).

Blitz01

As the others have said, they cannot 'force' you to take out a loan.
If you don't though, they will default you and turn the sharks onto you for repayment.

Personally, i think it is a wise move to take the loan.

redpete

helpneed wrote: »

...as I have already paid the interest off on my existing loans I am reluctant to pay an additional 4k in interest on the same borrowings again...

If you haven't paid of all the loan then I don't understand how you can say you've paid off the interest. If you still owe them money then that debt will be incurring interest still.