Consolidation Loans, do they even exist?

MusS10

Hi All,

I know that most of you here are against consolidation loans and in favour of being Debt-Free.. I totally get it and respect each and everyone's choice to live a debt-free life.

Like everyone else, I am entitled to my own choices and frankly I choose to live my life in the most enjoyable way possible regardless if I am debt-free or not. As long as as I am meeting my monthly payments on time and in full, I do not see why borrowing from banks is an issue, after all that is how banks earn their living..

I am in my fifties and have borrowed and repaid throughout my adult life, always responsibly hence why my credit files are in the excellent bracket..

My issue now is how to get a loan to consolidate other debts without failing the ""affordability"" lark?
If I am able to afford a £700/month payments without a fail for over 30 years then surely I can afford a £300/month in lieu !! I only want to slash my monthly payments so that I can work less hours and perhaps play more Golf

I am aware that many will say the lender doesn't believe that you will pay off the existing debts with the consolidation loan but why call it a "CONSOLIDATION" loan then? Isn't that false advertisement? Shouldn't that be disallowed by the financial conduct authority? Also couldn't they pay the existing lenders themselves from the new loan to be assured?

Many people have asked this question in these forums before but the answers seem to always drift to how detrimental consolidation loans are in the long run etc..
Can someone please answer the question about whether this type of loans really exist and how to get it rather then lecturing about debt and debt-free wannabe..

Many thanks to you all, and full utmost respect to all you debt haters out there. Good Luck as long as it makes you happy. After all life is all about happiness..

God Bless

Browntoa

Moved to the loans board from up your income board

foxy-stoat

MusS10 wrote: »

I am aware that many will say the lender doesn't believe that you will pay off the existing debts with the consolidation loan but why call it a "CONSOLIDATION" loan then? Isn't that false advertisement? Shouldn't that be disallowed by the financial conduct authority? Also couldn't they pay the existing lenders themselves from the new loan to be assured?

Can someone please answer the question about whether this type of loans really exist and how to get it rather then lecturing about debt and debt-free wannabe..

I think many confuse the personal loan used to consolidate debt and a consolidation loan. I am sure that many have taken out a loan to clear all debts with all good intentions, done the sums etc and then not addressed the reasons why they were £30,000/£40,000 in the red to start with, then after a year or 2 they have the loan, and another £30,000-£50,000 on the credit or store cards as they lenders think they paid all that back why not increase all the card limits and wonder how did that happen - next step is to go insolvent then claim the bank shouldn't of let me borrow the tens of thousands so its all their fault.

If your asking do the exist, answer is yes and manged correctly it would work, like cancelling all credit cards and never using credit again until the loan has been repaid, as clearly the poor sap who is £30,000/£40,000 in debt cannot budget or save properly, or had a long run of bad luck with boiler, car or house repairers, or may have 3 60 inch tv's and the latest Iphone 12 or whatever.

How to get one.....apply for one and see what rates they offer you then decide if its worth it or not.

Just dont assume that you will get a loan used for consolidation at 3% interest and claim false advertising, because you will unlikely get a low rate loan for consolidation.

Good luck and report back when you play more golf.

bigisi

MusS10 wrote: »

I am aware that many will say the lender doesn't believe that you will pay off the existing debts with the consolidation loan but why call it a "CONSOLIDATION" loan then? Isn't that false advertisement? Shouldn't that be disallowed by the financial conduct authority? Also couldn't they pay the existing lenders themselves from the new loan to be assured?

ANY loan can be used to consolidate, the only issue is whether you pass the bank's affordability and other criteria. If you don't you're not getting the loan whether you think you can afford the payments or not, it's not your opinion that counts.

MusS10 wrote: »

God Bless

Hmmm, whatever. Maybe she'll give you a loan, she'll surely know you're going to pay it off or at least forgive you if you don't?

EssexHebridean

You're right about the reason that you'd likely fail the affordability checks - but it's about more than the bank not "believing" you'll clear the other debt. In most cases people DO clear the debt they intend to - but because they've not sorted out the issues that lead them to live their lives funded by money that's not theirs, they then accrue further debt along the line, on top of the loan. Eventually, if that keeps happening, it reaches the point where something has to give, either because ill-health reduces earnings unexpectedly, or because of redundancy and difficulties in getting new employment (And we all know that is a very realistic issue above a certain age point) - and that is when payments stop getting made. A constant cycle of debt/borrow/more debt shows on your credit history that you are a "bad risk" and lenders will eventually reach the point where they feel you are a bad risk for them.

You can choose to take the above as a "lecture" if you want - you've already had the answer about your "Consolidation Loan" as a specific type of finance anyway. Those of us who believe in paying our way and living within our means will continue to bang that drum I'm afraid though - and it if helps just one person, down the line, to decide to make responsible choices going forwards, then all power to us.

SnowTiger

bigisi wrote: »

There's only you calling it a consolidation loan, no banks do...

Barclays, Halifax, Nationwide, HSBC and Natwest offer consolidation loans.

Lots of other lenders do too.

Let's take HSBC as an example:

HSBC UK > Loans > Products > Debt Consolidation Loan

If you’ve got debt in various places, including credit cards and loans, a debt consolidation loan could help you bring it all together, potentially saving you money and making it easier to manage with a single monthly repayment.

Tell us how much you want to consolidate and how quickly you want to pay it off and, if you’re an existing HSBC customer, we could give you an instant decision.

bigisi

SnowTiger wrote: »

Barclays, Halifax, Nationwide, HSBC and Natwest offer consolidation loans.

Lots of other lenders do too.

Let's take HSBC as an example:

So they do, that'll teach me to shoot my mouth off! Post amended.

robber2

To answer your question directly;



yes they do exist, and yes there is no reason that your application will not suceed as long as the lender is happy that the repayments are affordable.



However; your level of affordability is massively affected by your level of debt. Perhaps you can now see the problem the may have and maybe understand why so many on here are always banging on about the importance of being as debt free as possible


Its rarely easy to have it both ways in life.



Rob

Ben8282

My issue now is how to get a loan to consolidate other debts without failing the ""affordability"" lark?
If I am able to afford a £700/month payments without a fail for over 30 years then surely I can afford a £300/month in lieu !! I only want to slash my monthly payments so that I can work less hours and perhaps play more Golf

Have you actually applied for a loan and been refused?
Your OP implies you have not had any previous problems during your 30 years of borrowing so not sure why you are anticipating a problem now.

DCFC79

Consolidation loans don't exist, the option to consolidate is a select-able choice on the application.

EssexHebridean

DCFC79 wrote: »

Consolidation loans don't exist, the option to consolidate is a select-able choice on the application.

Various lenders do market their loans under that heading though - see the links posted earlier.