Natwest Unsecured loan consolidation- yes or no??

cjalynch

Hi there,
Had a call from my friendly bank today to say we had gone over our overdraft limit and would be charged 28 pounds. (overdraft is 4,000).
They are offering us a 17,500 pound loan to cover this, our current loan (has 20 payments left on it at 215.00 a month) and credit card bill (9,300 pounds).
The repayments would be 358.00 a month. Currently my minimum credit card payment is 212.00 a month whic with the overdraft interest and fees and the current loan repayment puts our costs to the bank at 480.00).
Interest on the overdraft is 17.9% and on our current loan 6.9%. The credit card is also 17.9%
The loan they are offering is at 7.8%
I know that on paper this would help us out, I am just really loathe to get into another five-year deal with them as I had hoped to pay off the current loan and then throw money at other debts. The trouble is that our budget is so close that I keep being slammed with late payment charges on the credit card (I am paid by cheque and it isn't always on time).
Without posting a full SOA, would anyone be willing to say whether this new loan is a good idea or not??
Any opinions welcomed.

Many thanks.

jonesMUFCforever

Without a SOA it is difficult to say. On the face of it it looks better but only if you do something useful with the 'extra money' you will now have every month like overpay the loan?
This will bring down the number of repayments significantly

cjalynch

Well, we wouldn't actually have any extra- at the moment we are dipping into what little savings we have every month to make up a shortfall in income over expenditure. Thanks to this site we are in a considerably better position than we were two years ago when I was expecting our second child, but the loan would still leave us short by about 50 pounds a month. If I took an extra 800 pounds on the loan which the bank have said they can go up to 20,000 (the 800 is what is left of a 5,000 debt I owed the Inland Revenue and have been paying off at 100 pounds a month) we would then have a bit left over every month, but as this would be paid off anyway next March and it is at a lower rate of interest, I don't really want to do it.

Thank you for your comments.

Halons

I was in a similar situation to you and Natwest told me that I should take out a loan to pay off my overdraft, existing loan and credit card bills. I already had a loan with Natwest for a car. The above repeated itself again and again (Stupid spending) and I ended up hating myself because I seemed to have a new 5 year loan with Natwest every 12 months.

My experience has told me to never, ever, get a 5 year Natwest loan to consolidate exisiting debt. Instead I got a couple of 0% interest credit cards, transferred my debt to them and continued to pay off my loan and chuck money at the credit cards.

Also, I beg you to remember paying your credit card on time (Even if it's the minimum pament). Late payments leave a lasting mark on your credit and can stop you getting credit later on when you might really need it.

If you do decide to get a loan though, make sure that you you don't accept their loan insurance, it'll cost you so much money (As it did to me). Get it from somewhere else (There are links on the site somewhere for cheap loan insurance).

I also learnt that Natwest (or any bank for that matter) aren't a friendly bank, they're basically thieves preying on people like you and me. It's in their best interest to get you to take out a new loan, it might not however be in your best interest.

Sorry if that wasn't much help.

jonesMUFCforever

Let's be clear about this - consolidation means combing EXISTING debt not new. You have already spent the money - so who is the thief here now?

inmypocketnottheirs

ejones999 wrote: »

Let's be clear about this - consolidation means combing EXISTING debt not new. You have already spent the money - so who is the thief here now?

Helpful????

Halons

Consolidation doesn't just mean combining EXISTING debt not new. It means existing debt PLUS all the interest they charge you PLUS the loan insurance they'll try to sneak onto your loan PLUS the fact that the bank owns you for another 5 years minimum.

I'm in debt at the moment and every solution my bank has given me (more loans) means even more debt but spread over 5 years. Every solution this site has given me means less debt and over a shorter term. Why can't my bank offer me the same advice? So in my opinion, the banks are the thieves.

inmypocketnottheirs

Halons wrote: »

Consolidation doesn't just mean combining EXISTING debt not new. It means existing debt PLUS all the interest they charge you PLUS the loan insurance they'll try to sneak onto your loan PLUS the fact that the bank owns you for another 5 years minimum.

I'm in debt at the moment and every solution my bank has given me (more loans) means even more debt but spread over 5 years. Every solution this site has given me means less debt and over a shorter term. Why can't my bank offer me the same advice? So in my opinion, the banks are the thieves.

Absolutely!

Glad you have had your lightbulb moment!:beer:

jonesMUFCforever

Halons wrote: »

Consolidation doesn't just mean combining EXISTING debt not new. It means existing debt PLUS all the interest they charge you PLUS the loan insurance they'll try to sneak onto your loan PLUS the fact that the bank owns you for another 5 years minimum.

I'm in debt at the moment and every solution my bank has given me (more loans) means even more debt but spread over 5 years. Every solution this site has given me means less debt and over a shorter term. Why can't my bank offer me the same advice? So in my opinion, the banks are the thieves.

In that case you spent it - you now manage your finances that will allow you to repay - easy!

jesdan

the only thing i will butt in with here, as in my case, this "existing spending" was actually made up of bank charges and therefore Nat West was actually gaining 3/4/5/6 times over with charges, then loan, another loan etc etc. Personally I am going down this route and now in court for them to prove otherwise as I am sick that these institutions are allowed (or have been allowed) to get away with this for so long.

I'm all for paying what I owe but not paying for a bank's greediness!

lotto-dreamer

yes, Natwest loans :mad: ....worst mistake I ever made in my life.

I wanted to increase my mortgage but they insisted I rather take out a loan at 7.4%. An increase on my mortgage would have been much more affordable and there was plenty of equity in my house. In desperation I took out the loan. I have never regretted anything so much in my life. Definitely a case of trying to get more money out of me than what I could comfortably afford.

After sleepless night went back next morning and asked for them to take off the payment protection portion. I was met with icy stares. They did eventually redo offer without the pp.

May I suggest you look at other loans first. My biggest mistake was not shopping around. Unfortunately, I hadn't discovered this site.