Should consolidation loans be paid direct to creditors..?

ferry

Just thinking out loud really and quite sure I read about this somewhere before..but wanted to guage what you all think about the idea of people who do decide to take out debt consolidation loans being forced to pay this directly back to their creditors automatically instead of to the debtor first- as this will surely remove the temptation to spend again.

What would be the for and against argument for making this a requirement for people who take out debt consolidation loans..?

Terry

immoral_angeluk

Sounds like a good idea to me.. but surely then the companies wouldn't make as much money from the people who do spend the consolidation loan and then need another loan to cover the original loans plus the debts they should've paid off?

I_was_a_fool

My last consolidation loan was paid directly to my creditors. Didnt make a blind bit of difference.

After the consolidation, yes I had less to pay each month, but I still didnt have enough left to live on, so I carried on putting things on the credit cards and ended up back where I started. I closed some of the cards, but not all.

If I had known then what I know now, I wouldnt have consolidated, especially when it still left me so little to live on. I should have opted for a DMP then, which I have now done.

So the warning is, if you must consolidate, make sure it leaves with you sufficient income to live on! Then make a budget and stick to it. And cut up all the cards. And close the accounts! And change your attitude to spending!

Sharon

Crown

immoral_angeluk wrote: »

Sounds like a good idea to me.. but surely then the companies wouldn't make as much money from the people who do spend the consolidation loan and then need another loan to cover the original loans plus the debts they should've paid off?

Totally agree. Yes it would be a good solution ti get people out of debt but these companies do not want us out of debt as we pay there wages!

supersavershal

I had a consolidation loan and they asked for all my debts and account numbers and they sent me the cheques to pay them all off.I sent the cheques and also sent a letter asking them to close the accounts.I did keep one credit card (I just couldnt let go) so far I have not run it up.I have used it a couple of times (tickets, holidays ,etc) but have also paid it off in full each time.Im determined this time not to get into debt again.