Consolidation Borrowing Issue

Dobbibill

Chris1397 wrote: »

Hi


I have in the past been quite bad with my money due to certain reasons, I'm now in a good way however the past is putting added pressure on my finances.

Hi Chris, welcome to the forum.

What sort of pressures are you encountering? There may be better options for you.

I have tried to consolidate two debts my bank Lloyds are happy to help but at an APR of over 20%, they advised I looked elsewhere which I did, my credit rating is excellent and I can reduce my outgoings by over £200 a month and save also on interest approx. £2000 over the term, the trouble is that no bank or loan company will approve as they will not trust that the money they pay to me will consolidate the debt, I have asked if they could clear the debt direct but apparently this cannot be done.

How much is the APR on your two debts? Are they more/less than 20%?

Some good advice in PPs with 0% BT CCs.

As already said, your credit rating is irrelevant to lenders. The only people that see it are you and the CRA that supply it. Lenders will look at the history of credit. Due to your past troubles, this will be the reason other lenders won't look favorably at you.

Freeing up more disposable income each month does not mean you aren't in debt any longer, if anything, in general, it encourages more spending as people think, 'I can afford to do x, y and z because I don't have the debt payments to make'. etc
This is not to say that you will do the same, but there are many threads on here where people have had the best intentions in the world but the debt just doubles as life throws in a curve ball. This is why consolidation rarely works.

If you were to go ahead with the loan from Lloyds, they allow overpayments quickly and easily on their online banking. Would you overpay with the money you are saving each month? It would in turn reduce the amount of interest you pay anyway.

Be careful, moving debt is not the same as paying it off.
I wish you all the best.

[Deleted User]

jasonroy940506 wrote: »

thanks for resolving the issue with us, i am thankful for all

No you're not. Vamos.

poppasmurf_bewdley

Your bank is proposing to charge you 20% on a loan because it's a consolidation loan. Banks always charge more for these loans. Why? Because you are proposing to reduce interest payments, and banks don't like that.

The only time I took out a consolidation loan (before I found out they were not a good idea), the loan company paid out the loan in made out cheques to each of my debtors, and sent them all to me to be forwarded to each company. I am sure some loan companies will do this, or maybe a more modern online version.

But as has been said, consolidation loans are not a good idea.