Loan advice

kezlou

Hi all

Just a quick question, it sounds stupid and it probably is.

Hypothectichally if i got a personal loan for X amount of money and as soon as it went into my account i put it striaght into a saving account. Could the bank if i had debts with them take the money from the loan / saving account and use it pay debts off that a person had with them?

I, e move the money from the saving account to pay an overdraft off.

Oh and if you paid off the overdraft immediately could the bank remove the facility straight away.

Thanks for your help

kez

crispy_chris

Yes, to all of your questions - assuming the savings account is held with the same bank that you have debts with.

DevCoder

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innovate

kezlou wrote: »

Hypothectichally if i got a personal loan for X amount of money and as soon as it went into my account i put it striaght into a saving account.

Serious flaw in this plan is that you will not find a savings account that pays more net interest than what you have to pay for the loan.

So you'd just dig deeper into the hole you are already in.

Sorry.

pmduk

If you're in so deep with a bank that they'd consider using the right of set-off, you may find it difficult getting a loan in the first place.

kezlou

Thanks for the replies.

I've been asked the question by a few different people but i didn't know the answer so thought i would ask on here.
One of my friends had an idea of getting a £10000 loan off the bank and using it as a deposit so they could get a mortgage.They have various debts which total below £5000 and thought financially it would better to buy a house than continuing to rent a house privately.

I'n thinking of getting a loan just as a fallback if i couldn't get student finance so i can go back to uni and finish the last year of a degree and to pay my overdraft off. The bank have effectively offered me the money but i'm seriously doubting whether to sign the paperwork. Its a big thing getting a loan for that amount of money.

innovate

Never take out a loan of any kind unless you have sound plans for paying it back.

kezlou

Exactly what i'm thinking innovate.
I'm 99% sure i won't be getting a loan.

I just have quite a few people asking me about them i.e finances and i don't the answers so i always come on here and ask.

DevCoder

kezlou wrote: »

Thanks for the replies.

One of my friends had an idea of getting a £10000 loan off the bank and using it as a deposit so they could get a mortgage.They have various debts which total below £5000 and thought financially it would better to buy a house than continuing to rent a house privately.

I don't know of any lender who will offer a mortgage where the deposit is funded from a loan.