Being Legitimate does not pay!

paddyrg

The problem is that a consolidation loan is still *another* loan, as far as lenders see it. The borrower could easily just spank the cash again, so it is treated as a separate loan. If that takes the borrower to over about 50% of their income in debt, they will typically decide that the borrower is overextended. And if the OP is paying 70% of his annual salary to lenders, the loans are clearly adding up to more than 50% of salary, so he is not creditworthy again, as they see it.

Good advice re talking to lenders yourself as opposed to debt management company.

sharpy2010

It makes you wonder, why hasn't a company been created which offer *just* consolidation loans? And to ensure the customer consolidates, the company could approve the loan for the customer and then pay the debts off on behalf of the customer. That way, the loan will definitely be used for consolidation.

ironlady2022

sharpy2010 wrote: »

It makes you wonder, why hasn't a company been created which offer *just* consolidation loans? And to ensure the customer consolidates, the company could approve the loan for the customer and then pay the debts off on behalf of the customer. That way, the loan will definitely be used for consolidation.

Not a bad idea but again cant guarantee payments to be on time every month

Tixy

sharpy2010 wrote: »

It makes you wonder, why hasn't a company been created which offer *just* consolidation loans? And to ensure the customer consolidates, the company could approve the loan for the customer and then pay the debts off on behalf of the customer. That way, the loan will definitely be used for consolidation.

Still wouldn't work, what if the new loan co pays off credit cards and the customer just goes out and racks up more debt again on the cards.

Plus there did used to be cases where a new co would pay off an old co loan balance - but I've seen people with problems several years later with old co chasing for the original debt because they have no record of new co paying the loan off or additional interest was incurred before the payment made. Customers then find themselves unable to prove that the payment was made or that it was for the correct amount.

RJP33

sharpy2010 wrote: »

It makes you wonder, why hasn't a company been created which offer *just* consolidation loans? And to ensure the customer consolidates, the company could approve the loan for the customer and then pay the debts off on behalf of the customer. That way, the loan will definitely be used for consolidation.

I guess there's a big issue around high risk of ever making a profit and the admin of arranging all the different loans to be paid off.

Right idea though for the person not to have the money to repeat the same mistakes again.