Why am I not being allowed to consolidate my debts?

william2074

I'm aware I'm in a very precarious position. I am almost 26 years old and owe around £20,000 in unsecured and payday loans and one credit card. My problem is not so much the amount, but the repayments thanks to the payday loans have got stupidly high and are now unaffordable. I have tried getting the loans consolidated with my bank (Natwest), but despite them telling me that the loan passes an initial affordability test, when it comes to it, they are declined as they are being treated as EXTRA debt. I want to use this loan to pay off existing debts and I do NOT want it to become an additional debt. Why is there no way for a bank to understand this? They basically give me the "computer says no" answer rather than sensibly listening to me try to do the right thing and consolidate my debts to reduce my repayments and keep my creditors happy.

I need to get my monthly repayments reduced ASAP and am meeting a manager at my local Natwest branch tomorrow (3rd Jan). Any words of advice about what I should say? I know I've got myself into a fairly dire financial situation and will soon start to really struggle unless I can right the ship with a good deal on a debt consolidation loan or else win the lottery...

Thanks

Derivative

The only way for them to be certain that you will use the money, ALL of the money, for consolidation is to write the cheques themselves.

I suggest you stop playing the lottery, for one.

Credit-Crunched

"I am almost 26 years old and owe around £20,000 in unsecured and payday loans "

Without sounding harsh, ever heard the expression

"throwing good money after bad"

Yes you will be paying less on a monthly basis, however with your historic view of credit what is to say it will not be racked up again?

Crunchy_Nutter

EdgEy wrote: »

The only way for them to be certain that you will use the money, ALL of the money, for consolidation is to write the cheques themselves.

Even then as far as they are concerned you will still have the cards - if all the cards are with the same bank you are asking for a loan with, perhaps worth asking them to close the card accounts, and swap to a loan, but since they are profitting nicely from interest and charges they probably won't do it.

I've been pretty much where you are - I was able to get a consolidation loan, and paid everything off - my problem was I then had a wallet full of temptation and zero balances, and got myself into more of a mess. What really frustrates me is I did that twice!

Good luck sirwilliam, whatever happens, but I would think long and hard before gettign a new loan - do you have the willpower I (and many others) lacked?

Regards,
Crunchy

tallyhoh

Mo OH's bank loaned him money twice to pay his debts off, he spent it all & still had the debts. Most banks are more realistic these days.

Have you considered other ways like a debt management plan?

meer53

A debt management plan is a much better idea. Banks don't like consolidation as they can't guarantee you won't do it again. A debt management plan draws a line under your debt, ensures that it's repaid, and makes sure that it's difficult for you to get into the same situation again. Hopefully by which time, you'll have realised where you went wrong ! Contact CCCS or Payplan etc.

william2074

"Without sounding harsh, ever heard the expression"...

I'm well aware that I've got myself into an incredibly bad position financially and don't require someone else to tell me what I already know. I'm sure you read the fact that I was 26 and wanted to act as teacher giving me a telling off, but I'd prefer you take your judgement elsewhere whilst I read the more helpful comments...

There's no reason for a bank to believe that I will not get myself into a similar position again other than my own assurance that I won't. I wake up feeling depressed and miserable about my debts and would do absolutely anything to wake up with manageable debts and feeling better. I don't want to go down this road of misery again and have learnt my lesson - I only hope I've not learnt it too late.

Is there really no way a bank will literally pay off creditors with money they loan to ensure that the loan isn't simply racked up as extra debt, but is genuinely used to consolidate? I'm flabbergasted by this fact...

eyeopener2

Follow the advice above. The last thing you want to do is consolidate, it doesnt work and you will end up in a worse position in 18 months time. Just have a look around this forum to see the stories of where it leads.

You need to address the payday loans first and come to a payment arangement with them, which isnt the easiest of tasks but possible, that should give you some breathing space to look at why you are overspending so much.

You should post a Statement of Affairs on here so you can be given guidance on the way forward, where to cut your expenditure and show a way out.

E2

william2074

meer53 wrote: »

A debt management plan is a much better idea. Banks don't like consolidation as they can't guarantee you won't do it again. A debt management plan draws a line under your debt, ensures that it's repaid, and makes sure that it's difficult for you to get into the same situation again. Hopefully by which time, you'll have realised where you went wrong ! Contact CCCS or Payplan etc.

I'm just worried a DMP will completely screw me over in terms of securing future credit (e.g. a mortgage once my current jointly-owned property is sold in a couple of years). Aren't DMPs incredibly damaging for one's future prospects? I have gone through the CCCS website and it suggests a DMP, but I'm worried about going down this road in terms of landing up with CCJs and black marks all over my records. I co-own my property with a friend who is unaware of my financial issues and I am also worried about them finding out. My family also doesn't know and I'm also deeply worried about their reaction to the size of debts I have racked up...

camuk81

I've done this in the past taken out one loan to cover something up and then gone out and spent again. I now am at a point where I will have all my expendable cash eaten up by debt repayments.

I can totally understand it is crippling you. I have just looked at what I have left after shopping, childcare etc and I have £30 to last till any other money comes in.

My bank have just revoke my overdraft and I have no choice but to own up to my debts.

Sit down and work out where you are at and what you are paying.

Please do not go to one of these high street lenders. I took a loan out in 2009 for £5,913 and the current running balance is £5,800 something.

From the sounds of it you may well have to look at a debt management plan. There is no magic wand to right this and you can't force the bank make you lend more.

Start by listing what you have and what you owe. Try the Soa calculator and work out what you owe and were you are going wrong.

Do you know why you have ended up on the payday loan route? Address the problems from the beginning and straight working from there.

william2074

Crunchy_Nutter wrote: »

Even then as far as they are concerned you will still have the cards - if all the cards are with the same bank you are asking for a loan with, perhaps worth asking them to close the card accounts, and swap to a loan, but since they are profitting nicely from interest and charges they probably won't do it.

I've been pretty much where you are - I was able to get a consolidation loan, and paid everything off - my problem was I then had a wallet full of temptation and zero balances, and got myself into more of a mess. What really frustrates me is I did that twice!

Good luck sirwilliam, whatever happens, but I would think long and hard before gettign a new loan - do you have the willpower I (and many others) lacked?

Regards,
Crunchy

Which lender did you find to provide a consolidation loan?