Consolidation Loans, do they even exist?

Thrugelmir

Nebulous2 wrote: »

That has always been the case. When there was a craze for remortgaging lenders expected people to spend the money on their house. There were many, many people driving around in their new kitchen.

From a lenders perspective all the evidence shows that consolidation loans aren't the answer. Majority of borrowers simply go on to accrue further debt. Lenders now are under increasing regulatory duty to lend responsibily. After all borrowers that default cost them money. Finance houses no longer act as if they are selling cans of baked beans. As was the case prior to the GFC when salespeople ran some of the banks.

sourcrates

No judgement from me, just an observation, one day you won`t be able to work any longer, so the credit will, eventually, dry up, the bills will still need paying, or the collectors will come a calling, the letters, the calls, what you will then call "harrasment", will get more intense, so unless you have a plan B, a large pension pot to fall back on perhaps, or savings of some kind, eventually, this credit bubble you are currently living in, will burst.

I`m sure it seems a great stratagy right now, enjoying the life of riley funded by the never, never, infact a lot of people choose to live this way, but it will not go on for ever, hopefully you already have arrangements in place pensions wise.

MusS10

IF you read my previous post you will notice that I am only looking for a simple answer to a simple question. I am not here for lectures, nor banter. Why is it so hard for some people to just answer the posed question without having to throw spanners into it. If you got nothing positive or relevant to say then find another thread to comment on..
For the purpose of clarification, my question is: How on earth can someone get a consolidation loan (My definition of consolidation is to turn all debts into one and pay one simple affordable payment per month just like all the banks keep advertising it..) if the banks will fail you on affordability (my definition of affordability is the amount being paid towards existing debts which will no longer exist once the new loan is granted)?! It defeats the object of the naming and defining of the type of loan that we are talking about Right?

And to clarify again, I am not in financial difficulty, nor have I ever been and I certainly do not plan to be in it in the future either.. I work hard and earn my living and I am comfortably affording my repayments. I JUST FEEL THAT SINCE I AM NOT GETTING ANY YOUNGER, IT MAY BE TIME TO BEGIN THINKING ABOUT WORKING LESS HOURS WHICH WILL MEAN EARNING LESS THEREFORE REDUCING MY DEBT REPAYMENTS CAN BE A GOOD IDEA (I'M BEING RESPONSIBLE) I GOT FEW DEBTS TOTALLING LESS THAN 20k AT AROUND £700/MONTH TOTAL REPAYMENT, AND A 20K LOAN WILL CLEAR THE LOT AT AROUND £300/MONTH REPAYMENT MEANING THAT I CAN AFFORD TO REDUCE MY EARNING BY 3 to 4 hundred/month. I AM NOT DESPERATE HENCE WHY I ONLY DID THE ELIGIBILITY CHECK AND NOT FULL APPLICATION. I AM JUST PLANNING AHEAD THAT'S ALL..
I was reluctant to post here as there always seems to be negative people who only see thing from their own point of view, I searched thoroughly throughout the forums for an answer to my issue but couldn't find a straightforward one so I decided to post it as new thread and carefully chose my words stating that I was not looking to be lectured about debt and nor was I looking to create debates and arguments. I simply want to know if there is somebody out there who managed somehow to get a "Consolidation" loan without failing the affordability hurdle to shed some light on how to go on about it and which lenders are more likely to offer such loans and if no such lenders exist then why is it being marketed as it is???

PS- I have changed my signature to define the type of person that I am. I like to live in the present moment and enjoy the gift of life.
And yes I am not judgemental to individuals and their way of thinking but I do judge banks who keep inundating me with promotional emails for the so called Consolidation loan offers only to fail me on affordability..
God Bless!

[Deleted User]

The simple answer is that there are consolidation loans available, but each individual needs to meet the varying requirements to get one.

You're more likely to get one from a sub prime lender, but in return the rates will be higher.

Vikipollard

MusS10 wrote: »

IF you read my previous post you will notice that I am only looking for a simple answer to a simple question. I am not here for lectures, nor banter. Why is it so hard for some people to just answer the posed question without having to throw spanners into it. If you got nothing positive or relevant to say then find another thread to comment on..
For the purpose of clarification, my question is: How on earth can someone get a consolidation loan (My definition of consolidation is to turn all debts into one and pay one simple affordable payment per month just like all the banks keep advertising it..) if the banks will fail you on affordability (my definition of affordability is the amount being paid towards existing debts which will no longer exist once the new loan is granted)?! It defeats the object of the naming and defining of the type of loan that we are talking about Right?

And to clarify again, I am not in financial difficulty, nor have I ever been and I certainly do not plan to be in it in the future either.. I work hard and earn my living and I am comfortably affording my repayments. I JUST FEEL THAT SINCE I AM NOT GETTING ANY YOUNGER, IT MAY BE TIME TO BEGIN THINKING ABOUT WORKING LESS HOURS WHICH WILL MEAN EARNING LESS THEREFORE REDUCING MY DEBT REPAYMENTS CAN BE A GOOD IDEA (I'M BEING RESPONSIBLE) I GOT FEW DEBTS TOTALLING LESS THAN 20k AT AROUND £700/MONTH TOTAL REPAYMENT, AND A 20K LOAN WILL CLEAR THE LOT AT AROUND £300/MONTH REPAYMENT MEANING THAT I CAN AFFORD TO REDUCE MY EARNING BY 3 to 4 hundred/month. I AM NOT DESPERATE HENCE WHY I ONLY DID THE ELIGIBILITY CHECK AND NOT FULL APPLICATION. I AM JUST PLANNING AHEAD THAT'S ALL..
I was reluctant to post here as there always seems to be negative people who only see thing from their own point of view, I searched thoroughly throughout the forums for an answer to my issue but couldn't find a straightforward one so I decided to post it as new thread and carefully chose my words stating that I was not looking to be lectured about debt and nor was I looking to create debates and arguments. I simply want to know if there is somebody out there who managed somehow to get a "Consolidation" loan without failing the affordability hurdle to shed some light on how to go on about it and which lenders are more likely to offer such loans and if no such lenders exist then why is it being marketed as it is???

PS- I have changed my signature to define the type of person that I am. I like to live in the present moment and enjoy the gift of life.
And yes I am not judgemental to individuals and their way of thinking but I do judge banks who keep inundating me with promotional emails for the so called Consolidation loan offers only to fail me on affordability..
God Bless!

You've been given the answer. You can apply for a LOAN for the PURPOSE of CONSOLIDATION. Whether you get it or not - and at what rate - is at the mercy of the institution to which you applied.

Yes, I have done that. Yes, I did get it - at a hideous rate, I might add, but hey, it made it one smaller payment, so that's alright? - but for a lot longer. Yes, it was the step onto the horrific steep downward slope. Would I do it again? No.

MusS10

sourcrates wrote: »

No judgement from me, just an observation, one day you won`t be able to work any longer, so the credit will, eventually, dry up, the bills will still need paying, or the collectors will come a calling, the letters, the calls, what you will then call "harrasment", will get more intense, so unless you have a plan B, a large pension pot to fall back on perhaps, or savings of some kind, eventually, this credit bubble you are currently living in, will burst.

I`m sure it seems a great stratagy right now, enjoying the life of riley funded by the never, never, infact a lot of people choose to live this way, but it will not go on for ever, hopefully you already have arrangements in place pensions wise.

I do have a pension. I do have savings, I do have assets and I am aware that I am mortal lol..
But I am a positive person and believe that our thoughts make our reality hence why I choose to think positive. Thanks anyway :beer:

MusS10

Vikipollard wrote: »

You've been given the answer. You can apply for a LOAN for the PURPOSE of CONSOLIDATION. Whether you get it or not - and at what rate - is at the mercy of the institution to which you applied.

Yes, I have done that. Yes, I did get it - at a hideous rate, I might add, but hey, it made it one smaller payment, so that's alright? - but for a lot longer. Yes, it was the step onto the horrific steep downward slope. Would I do it again? No.

Thanks mate. All points noted. Cheers

yksi

People offered advice because they wanted to help. You seem unwilling to hear it.

Yes, no matter whether they're called consolidation loans or personal loans or "other" loans, these loans do exist and it is possible for people to take them out successfully. Your problem is that you have a high debt (this is not a criticism, it just "is"). You have lived to this level of debt by choice and that's your right, and you are fully aware that your choices mean that everything's costing you more - and you are ok with this. But you now seem upset that there are other consequences to your life choices, and in this case, the consequence is that lenders don't readily trust your ability to repay the TOTAL repayments of both your existing £700 and the added £300 repayments.

I'm aware that the £700 would disappear and you'd be £400 per month better off. Unfortunately, lenders can't control other lenders and force those card issuers to close your accounts or to stop issuing you credit. All they can do is look at their own risk, dispassionately. In this case, they see that offering you a loan would potentially mean you have to pay £1000 per month just to stay afloat, and they don't think you can afford that, they think you might default on their loan. (It's neither here nor there that you wouldn't put yourself into that position - it's the potential risk that they consider.)

If your debt load had been low enough that the addition of the loan repayment would have kept your total repayments in the affordable range, you would have been approved for the consolidation loan.

The replies that others have given were the most appropriate suggestions for someone unable to consolidate. They have all been "Plan B" suggestions in the face of your unfortunate situation with the loan rejection, and people do actually care. Getting aggro and stamping your feet won't change the lender's mind, but cutting back on your living-large-lifestyle and paying down some of that debt, might, with a few years of discipline, allow you to consolidate then get to the 19th hole by lunchtime on a Tuesday. Your call.

MusS10

Deleted_User wrote: »

The simple answer is that there are consolidation loans available, but each individual needs to meet the varying requirements to get one.

You're more likely to get one from a sub prime lender, but in return the rates will be higher.

Thanks for a nice neat answer. Thumbs up
I am thinking to approach my bank directly and see what they can offer. I gonna book an appointment for some time next week and report back.
If the rates offered are too high then I will just carry on as I am for a couple of more years and my mortgage will have been paid off in full saving me a good £400 a month and my debts will be halved or even paid off..

EssexHebridean

Deleted_User wrote: »

The simple answer is that there are consolidation loans available, but each individual needs to meet the varying requirements to get one.

You're more likely to get one from a sub prime lender, but in return the rates will be higher.

Yes - as I said earlier. And the issue with Sub prime is also of course that it makes your credit file look even worse, down the line.

OP - firstly, please don't shout at people on here - it's incredibly rude. Remember that this is not an organisation with paid staff to answer your questions - all of us who spend time on here trying to help people do this as volunteers - we absolutely don;t expect thanks - although we often get those in spades - but we do expect courtesy.

You inferred earlier that those of us who choose to live without using "other peoples money" to fund our entertainments are somehow less happy than you - I can't speak for all of them, but having experienced life lived like that, and life lived the other way - from my point of view there is no comparison. Debt free, mortgage free in 13 years rather than the standard 25 year term, and now working to a budget that enables us to save money each and every month towards the future, go away on holiday several times a year, and replace cars when the time comes with a cash purchase - that all feels far better than the debt ever did. Am I happier now? Hell yes - no question. Can happiness be bought? No - I don't believe it can. Pleasure, for sure - but happiness, no, I don't think so.

The problem with your "simple question" is that the whole subject is far more nuanced than that. Also - this is a public forum and while we always try to advise the OP of a thread directly, we also try to bear in mind that others will happen along, research as you say you have on a particular subject, in this case consolidation, and will find this thread. Some of those people may realise that they are reading things that make them uncomfortable, and that perhaps there is a good reason for that, and as a result of that reading will decide to step back from consolidation and ever increasing debt. If just one person does that, the detail that several of us have taken the trouble to put into this thread will have been well worth the effort. To be blunt - public forum = not all about you.

A lot of input has been given on this thread from people with a combined huge number of years of experience on here. Of course you can absolutely ignore all of it - that is your absolute right - but hopefully the explanation above has clarified for you why we're gone into extra detail. As with all everyone in your situation, you will be welcomed back here in the future to help you sort out your situation - although I can't promise that we won't remind you of this thread, at that stage...