moneyback bank loan? (merged)

Beena72

Hi all,

At the end of last week I applied for a MoneyBack loan through Alliance and Leicester, to consolidate my credit card debts.
I've been a bit of a tart with credit cards in the past but having been an MBNA customer, most of the good offers aren't available to me at the moment. I'm also very nervous about applying for new credit cards because i have been turned down for a couple in the past, and I also doubt whether 'll get a high enough limit to cover my debt (pushing on toward 10k :eek: but not increasing thankfully ). I'd really like to be able to have a fixed amount over a few years that i can budget around.

I'm a homeowner with over £100k equity, and have only been late with one credit payment ever.

I've now been told that I have been declined for the A&L loan due to bad credit scoring, and when I rang for more details I was told they couldn't pinpoint the problem but that it may be a combination of having had the current job for less than 12 months, and our home budget account having gone over it's overdraft limit last month (I blame the energy companies upping the dd payments hugely :mad: ).

Anyway, what I wanted to ask was whether I should try another company for a loan, with the risk that the refusal from A&L will have worsened my score, making things even worse with another refusal, or to think about putting my debt onto the mortgage, so I can get on with my life and start saving. (We are hoping to start a family soon and at the moment my debt repayments would make life very difficult if my wife had to stop working).

Thanks,

Rob

mountainofdebt

I wouldn't apply for any more loans or credit cards for a while...too many applications may make you look desparate for credit and it does hit yoru rating for six.

You say you have been a bit of a tart in the past. Have you cancelled these cards or simply brought them down to nil.

If its the later then I would cancel them ....I was recently turned down for a natwest card and they told me that it was because of my availability of credit so a few credit card limits have been reduced.

Also hubby was late on more than one occasion with his cerdit cards and he had a massive o/d for months, nay years, but once he closed down his old cards, he got accepted for a number of 0% deals.

What cards/aprs/balances/limits do you have?

I only ask as sometimes it's an idea in the short term to shuffle your debt around than to risk another refusal.

Another idea is what's your wife's credit like? Again there is nothing stopping her applying for cards (assuming she's not got too many either) and transferring 'your' debt to a card in her name - I assume that she would have no qualms about this ??????

Again personally I would take what ever credit card limit they offered me - anything at 0% is better than paying any interest

Beena72

Thanks Mountainof debt (is that name copyrighted? I feel it suits me!)

I've got about £5500 with Virgin with a 7k limit, the introductory period is just running out on it. And £3400 with HSBC with a similar limit. That's not a good rate.

I must also have quite a large amount of a available credit with Halifax One (about 5k), Capital One (same) and Egg (not sure of limit). None of those three has any credit on at all. I've haerd mention of trying to negotiate with existing lenders to switch back to them for a preferential rate, is this easy or does one have to have the negotiating skills of Terry Waite to get a result?
(Sorry if I'm straying into credit card forum territory here).

mountainofdebt

Well for starters do you have a pre May 2005 egg card? If so when is your anniversary month? If you're not sure, send them a secure message and ask them.

During your annversary month you can transfer up to 95% (and there is a way to get up to 97%!) and the balance attracts 0% for 5 months. However to get the most out of this your balance should be zero before the beginning of the month and you should NEVER NEVER spend on your egg card during these 5 months.

Next I would phone up Halifax and Capital One and ask them what deals they're offering to customers wanting to transfer balances. See if they would be willing to offer you a promotional rate. Even if they're not then it still might be worth trasnferring to them PROVIDED a) the rate they are offering is below the Virgin rate and HSBC rate and b) they willing to do it fee free. Only you will be able to judge whether it's worth doing this.

Then assuming you do transfer I would cancel the virgin and HSBC cards once the trasnfers have gone through. If you don't make the trasnfers then I would close down the Halifax and Capital One cards.

Then after say 6 months when the dust has settled on your credit rating apply for a 0% card and see what happens!

Keep your egg card open though and use your anniversary month promotion !!!

As for payments well it goes without saying that all payments should be made on ttime but how much are you paying into your Virgin card at the mo? I guess that its just £5 plus interest.

If that is the case expect a huge increase in payments when the promotional period comes to an end.

Even if you aren't able to reduce the interst rate but are able to throw more money at the debt then throw any extra money at the debt with the highest interest as this will reduce the amount of money you repay in total (sorry if this is stating the obvious!)

Use https://www.whatsthecost.com/snowballing to see the effect of throwing money at the highest debt.


Hubby and I are a long way off from being debt free but by following these principles (and especially reducing credit card limits as the balances have decreased) have made us more attractive than we previously were

hth

Beena72

Yup, the Egg card is long standing, I'll find out the anniversary, but I've a horrid feeling I've just missed it.

Luckily I didn't fall into the trap of paying Virgin's (rather evil) £5 minimum payment, I've been clearing about 200 a month off that.

I'll ring around my existing providers to see what they will offer.

Thanks again mountain, that was all really helpful. :T Yay for you.

Polly

Have just applied for this loan, as recommended in this week's email. I didn't want the payment protection but got an extremely hard sell from the adviser I was asked to call. They eventually approved my loan (at the headline rate) but not before warning me of all the disasters that could befall me during the term of the loan and "strongly advising" that I take their (expensive) insurance cover! Be warned....:(

Devo

Unfortunately, selling protection insurance creates massive commission bonuses and so they really want you to take it... well done for not buckling and giving into their futile efforts :T

Mark7799

Devo wrote:

Unfortunately, selling protection insurance creates massive commission bonuses and so they really want you to take it... well done for not buckling and giving into their futile efforts :T

Hear hear!

The best way to respond to the hard sell is to get alternative quotes (invariably cheaper) and throw these back at the staff. It is worthwhile ensuring you have cover should a mishap befall you but the policies offered by the Banks are usually VERY expensive for what they offer and there are far cheaper options around .

Rafter

Had to laugh at this from their website FAQ's:

Q. Why do you only offer moneyback on insured loans?
A. As a responsible lender, we believe customers should protect their loan repayments against changes in circumstances. This is why we offer moneyback on fully protected loans. Customers who do not take loan protection still benefit from a great market-leading rate.

My view........

Nothing to do with responsible lending. This is a marketing gimmick!

On the quote I got the PPI cost £74 a month. The cashback worked out at £3 a month - a wopping 4% for not claiming.

A quote for the same cover from payprotect was £15 a month.

Isn't this just daylight robbery?

sarbre

I transferred my loan to them so I could pay it off a bit quicker. (My previous loan with Barclays, also at 5.7%, wouldn't let me decrease the length of the loan.) I had no intention of taking out PPI but had to listen to the PPI spiel for about 20 minutes. It was quite aggressive selling, and I nearly put the phone down when he kept arguing with me about it, trying to make me feel very irresponsible for not taking out the protection. I let him ramble on but said NO I WOULD NOT LIKE ANY COVER at the crucial moment!