Why Can't I Refinance My HSBC Loan at a Lower Rate?

Sasek

Isthisforreal99 said:

Sasek said:

Emmia said:

Sasek said:

Is there no way for me to take a 'consolidation' loan where the new loan/bank would automatically pay off the old loan and credit card balance and even close down my credit card? This is 100% possible in Europe and I would be really suprised if this would not be available here. I honestly do not want to take on additional loan, just refinance the existing loan at a better interest rate. The reason I don't want to pay it off currently is - I will have some money come to me in about a year and I need to 'survive' until then. 

To answer the question about my NET monthly income - the minimum is £2048/month but often it is more as I may do some overtime etc. 

My idea was to apply for a loan at whichever bank and have that bank just repay and close down my existing loan and potentially credit card directly with HSBC (someone says it may be better to combine the loan and credit card balance via the consolidation loan). 

But the banks don't normally let you "refinance" in the way you're seeking.

If you don't get a "consolidation loan", what is your plan to pay off the loan and credit card?

If I don't manage to refinance it with a lower interest rate, I will just continue to make the monthly payments of £372.19/month for another year and half at which point I should have enough funds to pay off the rest of the loan. I am really really suprised there is no way for another bank to give me a loan to pay off the other loan. Europe has this available for decades now and even in the UK you have this same for credit card offers (you see this a lot on MSE - move your credit card with this special offer to this other bank). Why couldn't there be a way for me to 'move' my loan to a different bank under better conditions (interest rate)? 

But your income doesn't allow you to do that. As I said earlier I'm amazed anyone would lend £25k to someone on £32k. 

Also, there is no guarantee you would get a better rate than the 9.9%, which can be beaten but is certainly not the worst rate out there.

What was the purpose of the original £25 loan?

The current pay-off balance is £18,215. Why can't you shop around and change the provider of a personal loan in the UK the same way you can do for credit cards, utility bills, phone carriers etc.? It's not that difficult in Europe - by applying for a refinance loan (or whatever you want to call it in English), you simply agree the new financial institution will pay off the current balance at the existing bank on your behalf and make a loan for you with them under the new terms. It's technically possible (I've seen it done in other countries). I thought London was the financial capital of the world? I really strugle to understand why it's not possible here. 

The purpose of my original loan was for an investment that is going well but tied up for another year or so. 

Sasek

mjm3346 said:

You should simply pay it off which would leave you with about £9k in savings which you could add to at over £350 a month - in the unlikely event you could get another loan odds are the interest rate will be well over 9.9%

Why is the interest rate so high? My friend in Europe got 2 personal unsecured loans this year: 

- one with 5.3% interest
- another one with 5.4% interest

Why would it have to be more than 9.90% here? 

Thank you. 

Isthisforreal99

Sasek said:

Isthisforreal99 said:

Sasek said:

Emmia said:

Sasek said:

Is there no way for me to take a 'consolidation' loan where the new loan/bank would automatically pay off the old loan and credit card balance and even close down my credit card? This is 100% possible in Europe and I would be really suprised if this would not be available here. I honestly do not want to take on additional loan, just refinance the existing loan at a better interest rate. The reason I don't want to pay it off currently is - I will have some money come to me in about a year and I need to 'survive' until then. 

To answer the question about my NET monthly income - the minimum is £2048/month but often it is more as I may do some overtime etc. 

My idea was to apply for a loan at whichever bank and have that bank just repay and close down my existing loan and potentially credit card directly with HSBC (someone says it may be better to combine the loan and credit card balance via the consolidation loan). 

But the banks don't normally let you "refinance" in the way you're seeking.

If you don't get a "consolidation loan", what is your plan to pay off the loan and credit card?

If I don't manage to refinance it with a lower interest rate, I will just continue to make the monthly payments of £372.19/month for another year and half at which point I should have enough funds to pay off the rest of the loan. I am really really suprised there is no way for another bank to give me a loan to pay off the other loan. Europe has this available for decades now and even in the UK you have this same for credit card offers (you see this a lot on MSE - move your credit card with this special offer to this other bank). Why couldn't there be a way for me to 'move' my loan to a different bank under better conditions (interest rate)? 

But your income doesn't allow you to do that. As I said earlier I'm amazed anyone would lend £25k to someone on £32k. 

Also, there is no guarantee you would get a better rate than the 9.9%, which can be beaten but is certainly not the worst rate out there.

What was the purpose of the original £25 loan?

The current pay-off balance is £18,215. Why can't you shop around and change the provider of a personal loan in the UK the same way you can do for credit cards, utility bills, phone carriers etc.? It's not that difficult in Europe - by applying for a refinance loan (or whatever you want to call it in English), you simply agree the new financial institution will pay off the current balance at the existing bank on your behalf and make a loan for you with them under the new terms. It's technically possible (I've seen it done in other countries). I thought London was the financial capital of the world? I really strugle to understand why it's not possible here. 

The purpose of my original loan was for an investment that is going well but tied up for another year or so. 

You can shop around but if a lender doesn't want to take the risk on that is their perogative. What you think may happen in Europe is frankly irrelevant. As is the settlement figure, you still owe more than £22k, that is what your credit report will show.

Hopefully the investment is worth more than the total amount you will pay back. Borrowing money at 9.9% to invest is not wise and hopefully isn't the S&S ISA valued at £28500

Isthisforreal99

But if you want to keep trying - https://www.moneysavingexpert.com/eligibility/loans-calculator/search/

Sasek

Isthisforreal99 said:

Sasek said:

Isthisforreal99 said:

Sasek said:

Emmia said:

Sasek said:

Is there no way for me to take a 'consolidation' loan where the new loan/bank would automatically pay off the old loan and credit card balance and even close down my credit card? This is 100% possible in Europe and I would be really suprised if this would not be available here. I honestly do not want to take on additional loan, just refinance the existing loan at a better interest rate. The reason I don't want to pay it off currently is - I will have some money come to me in about a year and I need to 'survive' until then. 

To answer the question about my NET monthly income - the minimum is £2048/month but often it is more as I may do some overtime etc. 

My idea was to apply for a loan at whichever bank and have that bank just repay and close down my existing loan and potentially credit card directly with HSBC (someone says it may be better to combine the loan and credit card balance via the consolidation loan). 

But the banks don't normally let you "refinance" in the way you're seeking.

If you don't get a "consolidation loan", what is your plan to pay off the loan and credit card?

If I don't manage to refinance it with a lower interest rate, I will just continue to make the monthly payments of £372.19/month for another year and half at which point I should have enough funds to pay off the rest of the loan. I am really really suprised there is no way for another bank to give me a loan to pay off the other loan. Europe has this available for decades now and even in the UK you have this same for credit card offers (you see this a lot on MSE - move your credit card with this special offer to this other bank). Why couldn't there be a way for me to 'move' my loan to a different bank under better conditions (interest rate)? 

But your income doesn't allow you to do that. As I said earlier I'm amazed anyone would lend £25k to someone on £32k. 

Also, there is no guarantee you would get a better rate than the 9.9%, which can be beaten but is certainly not the worst rate out there.

What was the purpose of the original £25 loan?

The current pay-off balance is £18,215. Why can't you shop around and change the provider of a personal loan in the UK the same way you can do for credit cards, utility bills, phone carriers etc.? It's not that difficult in Europe - by applying for a refinance loan (or whatever you want to call it in English), you simply agree the new financial institution will pay off the current balance at the existing bank on your behalf and make a loan for you with them under the new terms. It's technically possible (I've seen it done in other countries). I thought London was the financial capital of the world? I really strugle to understand why it's not possible here. 

The purpose of my original loan was for an investment that is going well but tied up for another year or so. 

You can shop around but if a lender doesn't want to take the risk on that is their perogative. What you think may happen in Europe is frankly irrelevant. As is the settlement figure, you still owe more than £22k, that is what your credit report will show.

Hopefully the investment is worth more than the total amount you will pay back. Borrowing money at 9.9% to invest is not wise and hopefully isn't the S&S ISA valued at £28500

Thank you for your answers - it is much appreciated! One more question for you - why would the credit report show that I owe more than £22K? I am ready to pay off my credit card today and then my pay-off balance will just be what it would cost to pay off my existing personal loan = £18,215. Is this a glitch in the system? 

So sorry to ask this again but for me to be absolutely clear - there is no way for the new bank to pay off my existing loan directly on my behalf in the UK, is this correct? So when people apply for consolidation/refinance loans here, nobody checks whether they actually pay off the old loans/credit card balances? If they just keep the money as an additional loan, nothing happens? Thank you. 

Isthisforreal99

Sasek said:

Isthisforreal99 said:

Sasek said:

Isthisforreal99 said:

Sasek said:

Emmia said:

Sasek said:

Is there no way for me to take a 'consolidation' loan where the new loan/bank would automatically pay off the old loan and credit card balance and even close down my credit card? This is 100% possible in Europe and I would be really suprised if this would not be available here. I honestly do not want to take on additional loan, just refinance the existing loan at a better interest rate. The reason I don't want to pay it off currently is - I will have some money come to me in about a year and I need to 'survive' until then. 

To answer the question about my NET monthly income - the minimum is £2048/month but often it is more as I may do some overtime etc. 

My idea was to apply for a loan at whichever bank and have that bank just repay and close down my existing loan and potentially credit card directly with HSBC (someone says it may be better to combine the loan and credit card balance via the consolidation loan). 

But the banks don't normally let you "refinance" in the way you're seeking.

If you don't get a "consolidation loan", what is your plan to pay off the loan and credit card?

If I don't manage to refinance it with a lower interest rate, I will just continue to make the monthly payments of £372.19/month for another year and half at which point I should have enough funds to pay off the rest of the loan. I am really really suprised there is no way for another bank to give me a loan to pay off the other loan. Europe has this available for decades now and even in the UK you have this same for credit card offers (you see this a lot on MSE - move your credit card with this special offer to this other bank). Why couldn't there be a way for me to 'move' my loan to a different bank under better conditions (interest rate)? 

But your income doesn't allow you to do that. As I said earlier I'm amazed anyone would lend £25k to someone on £32k. 

Also, there is no guarantee you would get a better rate than the 9.9%, which can be beaten but is certainly not the worst rate out there.

What was the purpose of the original £25 loan?

The current pay-off balance is £18,215. Why can't you shop around and change the provider of a personal loan in the UK the same way you can do for credit cards, utility bills, phone carriers etc.? It's not that difficult in Europe - by applying for a refinance loan (or whatever you want to call it in English), you simply agree the new financial institution will pay off the current balance at the existing bank on your behalf and make a loan for you with them under the new terms. It's technically possible (I've seen it done in other countries). I thought London was the financial capital of the world? I really strugle to understand why it's not possible here. 

The purpose of my original loan was for an investment that is going well but tied up for another year or so. 

You can shop around but if a lender doesn't want to take the risk on that is their perogative. What you think may happen in Europe is frankly irrelevant. As is the settlement figure, you still owe more than £22k, that is what your credit report will show.

Hopefully the investment is worth more than the total amount you will pay back. Borrowing money at 9.9% to invest is not wise and hopefully isn't the S&S ISA valued at £28500

Thank you for your answers - it is much appreciated! One more question for you - why would the credit report show that I owe more than £22K? I am ready to pay off my credit card today and then my pay-off balance will just be what it would cost to pay off my existing personal loan = £18,215. Is this a glitch in the system? 

So sorry to ask this again but for me to be absolutely clear - there is no way for the new bank to pay off my existing loan directly on my behalf in the UK, is this correct? So when people apply for consolidation/refinance loans here, nobody checks whether they actually pay off the old loans/credit card balances? If they just keep the money as an additional loan, nothing happens? Thank you. 

You said in you OP that you currently owe £22,358? That is what will be reflected in your credit report. When you took out the loan you agreed to pay back the £25k + interest so £30+k? That is what your credit agreement was for so that will be the amount reflected in your credit report - feel free to check your own report.

Not saying that there is no way but only way would be with the existing lender and they have already said no.

I see you were quiet on the 'investment' point!

Isthisforreal99

Sasek said:

mjm3346 said:

You should simply pay it off which would leave you with about £9k in savings which you could add to at over £350 a month - in the unlikely event you could get another loan odds are the interest rate will be well over 9.9%

Why is the interest rate so high? My friend in Europe got 2 personal unsecured loans this year: 

- one with 5.3% interest
- another one with 5.4% interest

Why would it have to be more than 9.90% here? 

Thank you. 

Maybe they have a better credit history than you? Maybe earn more? Maybe less debt?

You can get loans under 6% here but not everyone will get that rate.

Sasek

Isthisforreal99 said:

Sasek said:

Isthisforreal99 said:

Sasek said:

Isthisforreal99 said:

Sasek said:

Emmia said:

Sasek said:

Is there no way for me to take a 'consolidation' loan where the new loan/bank would automatically pay off the old loan and credit card balance and even close down my credit card? This is 100% possible in Europe and I would be really suprised if this would not be available here. I honestly do not want to take on additional loan, just refinance the existing loan at a better interest rate. The reason I don't want to pay it off currently is - I will have some money come to me in about a year and I need to 'survive' until then. 

To answer the question about my NET monthly income - the minimum is £2048/month but often it is more as I may do some overtime etc. 

My idea was to apply for a loan at whichever bank and have that bank just repay and close down my existing loan and potentially credit card directly with HSBC (someone says it may be better to combine the loan and credit card balance via the consolidation loan). 

But the banks don't normally let you "refinance" in the way you're seeking.

If you don't get a "consolidation loan", what is your plan to pay off the loan and credit card?

If I don't manage to refinance it with a lower interest rate, I will just continue to make the monthly payments of £372.19/month for another year and half at which point I should have enough funds to pay off the rest of the loan. I am really really suprised there is no way for another bank to give me a loan to pay off the other loan. Europe has this available for decades now and even in the UK you have this same for credit card offers (you see this a lot on MSE - move your credit card with this special offer to this other bank). Why couldn't there be a way for me to 'move' my loan to a different bank under better conditions (interest rate)? 

But your income doesn't allow you to do that. As I said earlier I'm amazed anyone would lend £25k to someone on £32k. 

Also, there is no guarantee you would get a better rate than the 9.9%, which can be beaten but is certainly not the worst rate out there.

What was the purpose of the original £25 loan?

The current pay-off balance is £18,215. Why can't you shop around and change the provider of a personal loan in the UK the same way you can do for credit cards, utility bills, phone carriers etc.? It's not that difficult in Europe - by applying for a refinance loan (or whatever you want to call it in English), you simply agree the new financial institution will pay off the current balance at the existing bank on your behalf and make a loan for you with them under the new terms. It's technically possible (I've seen it done in other countries). I thought London was the financial capital of the world? I really strugle to understand why it's not possible here. 

The purpose of my original loan was for an investment that is going well but tied up for another year or so. 

You can shop around but if a lender doesn't want to take the risk on that is their perogative. What you think may happen in Europe is frankly irrelevant. As is the settlement figure, you still owe more than £22k, that is what your credit report will show.

Hopefully the investment is worth more than the total amount you will pay back. Borrowing money at 9.9% to invest is not wise and hopefully isn't the S&S ISA valued at £28500

Thank you for your answers - it is much appreciated! One more question for you - why would the credit report show that I owe more than £22K? I am ready to pay off my credit card today and then my pay-off balance will just be what it would cost to pay off my existing personal loan = £18,215. Is this a glitch in the system? 

So sorry to ask this again but for me to be absolutely clear - there is no way for the new bank to pay off my existing loan directly on my behalf in the UK, is this correct? So when people apply for consolidation/refinance loans here, nobody checks whether they actually pay off the old loans/credit card balances? If they just keep the money as an additional loan, nothing happens? Thank you. 

You said in you OP that you currently owe £22,358? That is what will be reflected in your credit report. When you took out the loan you agreed to pay back the £25k + interest so £30+k? That is what your credit agreement was for so that will be the amount reflected in your credit report - feel free to check your own report.

Not saying that there is no way but only way would be with the existing lender and they have already said no.

I see you were quiet on the 'investment' point!

Yes: 

• Outstanding balance: £22,358.40

• Today's Final Settlement amount: £18,215.41
  
  

I figure the outstanding balance is the current pay-off balance (if I paid the loan off in full today) + future forecasted interest. It doesn't seem fair to calculate it like that as I actually owe £18,215.41 as of today but if that is how it works, then OK. 

And apologies for not answering the investment point. It was NOT for the stocks and shares ISA. Instead, I bought a piece of a privately held company which turned out to be a solid investment well worth the money. 

Isthisforreal99

You say yourself the sensible thing to do would be to use the S&S ISA to clear the loan. It's certainly what I would do (and would have done at the start to not potentially pay £11k in interest).

Doing so now will save you £4k over the next 4 years. Paying more interest on borrowed money compared to how your ISA is increasing in value is the opposite of moneysaving

kimwp

Sasek said:

Isthisforreal99 said:

Sasek said:

Isthisforreal99 said:

Sasek said:

Isthisforreal99 said:

Sasek said:

Emmia said:

Sasek said:

Is there no way for me to take a 'consolidation' loan where the new loan/bank would automatically pay off the old loan and credit card balance and even close down my credit card? This is 100% possible in Europe and I would be really suprised if this would not be available here. I honestly do not want to take on additional loan, just refinance the existing loan at a better interest rate. The reason I don't want to pay it off currently is - I will have some money come to me in about a year and I need to 'survive' until then. 

To answer the question about my NET monthly income - the minimum is £2048/month but often it is more as I may do some overtime etc. 

My idea was to apply for a loan at whichever bank and have that bank just repay and close down my existing loan and potentially credit card directly with HSBC (someone says it may be better to combine the loan and credit card balance via the consolidation loan). 

But the banks don't normally let you "refinance" in the way you're seeking.

If you don't get a "consolidation loan", what is your plan to pay off the loan and credit card?

If I don't manage to refinance it with a lower interest rate, I will just continue to make the monthly payments of £372.19/month for another year and half at which point I should have enough funds to pay off the rest of the loan. I am really really suprised there is no way for another bank to give me a loan to pay off the other loan. Europe has this available for decades now and even in the UK you have this same for credit card offers (you see this a lot on MSE - move your credit card with this special offer to this other bank). Why couldn't there be a way for me to 'move' my loan to a different bank under better conditions (interest rate)? 

But your income doesn't allow you to do that. As I said earlier I'm amazed anyone would lend £25k to someone on £32k. 

Also, there is no guarantee you would get a better rate than the 9.9%, which can be beaten but is certainly not the worst rate out there.

What was the purpose of the original £25 loan?

The current pay-off balance is £18,215. Why can't you shop around and change the provider of a personal loan in the UK the same way you can do for credit cards, utility bills, phone carriers etc.? It's not that difficult in Europe - by applying for a refinance loan (or whatever you want to call it in English), you simply agree the new financial institution will pay off the current balance at the existing bank on your behalf and make a loan for you with them under the new terms. It's technically possible (I've seen it done in other countries). I thought London was the financial capital of the world? I really strugle to understand why it's not possible here. 

The purpose of my original loan was for an investment that is going well but tied up for another year or so. 

You can shop around but if a lender doesn't want to take the risk on that is their perogative. What you think may happen in Europe is frankly irrelevant. As is the settlement figure, you still owe more than £22k, that is what your credit report will show.

Hopefully the investment is worth more than the total amount you will pay back. Borrowing money at 9.9% to invest is not wise and hopefully isn't the S&S ISA valued at £28500

Thank you for your answers - it is much appreciated! One more question for you - why would the credit report show that I owe more than £22K? I am ready to pay off my credit card today and then my pay-off balance will just be what it would cost to pay off my existing personal loan = £18,215. Is this a glitch in the system? 

So sorry to ask this again but for me to be absolutely clear - there is no way for the new bank to pay off my existing loan directly on my behalf in the UK, is this correct? So when people apply for consolidation/refinance loans here, nobody checks whether they actually pay off the old loans/credit card balances? If they just keep the money as an additional loan, nothing happens? Thank you. 

You said in you OP that you currently owe £22,358? That is what will be reflected in your credit report. When you took out the loan you agreed to pay back the £25k + interest so £30+k? That is what your credit agreement was for so that will be the amount reflected in your credit report - feel free to check your own report.

Not saying that there is no way but only way would be with the existing lender and they have already said no.

I see you were quiet on the 'investment' point!

Yes: 

• Outstanding balance: £22,358.40

• Today's Final Settlement amount: £18,215.41
  
  

I figure the outstanding balance is the current pay-off balance (if I paid the loan off in full today) + future forecasted interest. It doesn't seem fair to calculate it like that as I actually owe £18,215.41 as of today but if that is how it works, then OK. 

And apologies for not answering the investment point. It was NOT for the stocks and shares ISA. Instead, I bought a piece of a privately held company which turned out to be a solid investment well worth the money. 

I think you are attributing too much detailed knowledge to the posters on this forum.  We do not know exactly what figure will show as owed on your credit record, we do not know exactly why you are not getting the offers you want and we definitely don't know why some financial products are offered in other countries, but not this one. Only a few people (if any) in the world will know these specifics.

In term of 22k showing on your credit record, I suspect the poster saw that you mentioned a 22k figure being owed in your message and used that to anchor their message to the relevant bit of your message so it was clear which part of your post they were discussing. Rather than meaning that it would be the exact figure in your credit record. If you want to know what is in there, the mse credit club gives you free access to check it. I think you can get free trials for the other reference agencies.