Secured Loan Shawbrook Bank - is it the right thing to do

decking

In order to consolidate £35k of credit care debt we are considering a secuting loan of £30k with Shawbrook Bank.

Does anyone have any experience or feedback about them?

The rate is fixed for 3 years and then onto variable. We intend to move in 3 years and pay off what is outstanding then - it seems the early payment penalty is £195 plus one months payments on top of what is outstanding.

Our own mortgage provider cannot help us as even though we have around £100k equity we do not meet the affordability criteria to be lent anymore. Outstanding mortgage is £172k with 15 years left.

I have also put out an enquiry about remortgaging to a different provder who will go to age 75 (my husband is 56 and I am 44) but my issue with this route is we have finally gone onto a really low mortgage rate (the fixed we were on for 5 years is a major factor in us getting into so much debt in the first place) and obviously if we change then this rate will be lost forever as will the chance to overpay the mortgage which I was hoping to do if we could get the debt sorted out...

Any advice on what is a sensibkle course of action would be welcome - my main concern is are Shawbrook reputable or borderline loan sharks as some secured lenders appear to be???

Thanks

nomunnofun

Definitely reputable - I have had business dealings with them. The £1 billion of lending turnover should reassure you.

http://uk.reuters.com/article/2013/09/09/uk-shawbrook-bank-idUKLNE98800420130909

decking

Thanks for that information - any feedback on people using them for secured loans would be greatly appreciated.

poppasmurf_bewdley

You need to find out from others who have dealt with them if, when the fixed rate ends and the rate becomes variable, what happens, ie does the rate only go one way - up?

From experience on this forum, that generally seems to be the way thing go with most loan companies.

Clive_Woody

Variable rates rarely go downwards and if they do it won't be fast or far. I assume the variable rate will not be linked to BOE base rate but will be changed whenever they feel like it.

Selling a house can take a long time so don't assume that you will simply be able to sell in 3 years time and cash in on the equity.

Don't mean to be rude but can you definitely afford a secured loan and a mortgage? With £35k of credit card debt it suggest you are already struggling.

decking

Thanks for the responses.

Yes we are struggling as we fixed onto a high mortgage rate of 6.2% in 2008 for 5 years which coupled with our child's nursery fees which never went below £700 a month we didn't have enough income and consequently turned to credit cards which of course was a big mistake.

Our current mortage payment now the fixed rate has ended is very low and adding the secured loan repayment to it still leaves us £800 a month better of allowing us to live without turning to credit cards as well as overpay on the mortgage some months.

I didn't think for one second that once the fixed rate of the loan ended that the rate would go down - this is what I am asking for - feedback on anyone who has used Shawbrook and how much and how often the rate rises once the fxed term has ended...

Thrugelmir

Extending repayment of your debts into retirement year isn't a good idea. As there's no discipline to actually pay them off.

decking

How do you mean? We would use the secured loan to pay off the credit card debt then in 3 years we plan to move and would pay the secured loan off on the sale of our house - of course we will have to wait to find a buyer which is why I am so keen to find others who have used Shawbrook to see what happens once the fixed rate ends

gb12345

decking wrote: »

I am so keen to find others who have used Shawbrook to see what happens once the fixed rate ends

What has happened in the past to other borrowers really has no bearing on what might happen to you.

If at the end of your 3 year fixed deal the BOE interest rate has gone up to say 10% then your rate with Shawbrook is likely to be sky high.

jonesMUFCforever

Three years is a long time -- how much new unsecured debt will you have aquired by then on top of the £35k?

fatbelly

I'd suggest popping over to the debt free wannabee board, where they will probably ask for a statement of affairs.

Moving 30k of debt from unsecured to secured status is a big step.