Secured loan, made to borrow more?

michael8626
michael8626 Posts: 94 Forumite
First Anniversary Combo Breaker First Post
in Loans
Hi,

I have just settled in full a secured that dates from October 2014.

Looking back at my original paperwork, I had requested £15K over 10 years for which I was given a repayment figure and interest rate.

At the very last minute when the loan was due to commence I was told I now needed to settle two old credit card debts otherwise I couldn't get the loan. In desperation I accepted a 20 year repayment term, new interest rate and an additional £7K added to the loan.

I know I could have walked away, but is it ethically right to force repayment of old debt in consolidation in order to obtain a new loan. I now also realise one of the old debts was statute barred.

Thanks in advance.

Comments

  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
    First Anniversary Name Dropper First Post
    They may of refused the £15K loan as you had other debt and failed their affordability calculator.

    Ethics dont really come into it.

    If one of the debts was statute barred then you would of had a load of defaults as well. I think you were lucky to get a loan in the first place but seeing as you have now settled it in full this post is a little be irrelevant now.
  • financegeek
    financegeek Posts: 140 Forumite
    michael8626 wrote: »

    I know I could have walked away, but is it ethically right to force repayment of old debt in consolidation in order to obtain a new loan. I now also realise one of the old debts was statute barred.

    Thanks in advance.

    I don't think you can claim to be forced as you didn't have to take out the loan. you could still have walked away but if you wanted the money, the only option was to clear the existing credit,

    well done on getting it cleared though :beer:
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
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    Mortgage lenders today can attach similar conditions to the mortgage offer. Repay outstanding loans/credit cards or mortgage funds won't be released.

    The secured loan company did exactly the same so your options were to walk away from the loan, find the funds to repay your outstanding debts, or add the debts to your loan. The choice was yours.
  • ReadingTim
    ReadingTim Posts: 3,970 Forumite
    Name Dropper First Anniversary First Post
    Their money, their terms and conditions; your choice - take it or leave it.

    You chose to take it.

    Is it ethically right to do something you think is ethically wrong?
  • poppasmurf_bewdley
    poppasmurf_bewdley Posts: 5,909 Forumite
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    They can have whatever conditions they like, assuming they remain within the law.

    In the past, I was told by the Yorkshire Building Society that I couldn't proceed with a mortgage until I had cleared a credit card.
    "There are not enough superlatives in the English language to describe a 'Princess Coronation' locomotive in full cry. We shall never see their like again". O S Nock
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    michael8626 wrote: »
    Hi,

    I have just settled in full a secured that dates from October 2014.

    Looking back at my original paperwork, I had requested £15K over 10 years for which I was given a repayment figure and interest rate.

    At the very last minute when the loan was due to commence I was told I now needed to settle two old credit card debts otherwise I couldn't get the loan. In desperation I accepted a 20 year repayment term, new interest rate and an additional £7K added to the loan.

    I know I could have walked away, but is it ethically right to force repayment of old debt in consolidation in order to obtain a new loan. I now also realise one of the old debts was statute barred.

    Thanks in advance.


    Since you could have walked away, please explain how you were "forced"


    You might as well say "in order to buy my house i was forced to get a mortgage and pay the purchase price".
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