Consolidation loans - beware

[peterjhale]

Day time TV has always has adverts offering loans to clear credit cards etc etc

But did you know these loans are secured against your home. Just have a look at this blurb on the bottom of a website that is advertising in a big way on TV at the moment.

ALL LOANS AND MORTGAGES ARE SECURED AGAINST YOUR PROPERTY
LOANS: A FEE OF UP TO 12% OF THE AMOUNT BORROWED WILL BE PAYABLE ON COMPLETION ON A NO LOAN NO FEE BASIS. OUR TYPICAL, VARIABLE RATE IS 15.9% APR.


MORTGAGES: A FEE OF 2% OF THE MORTGAGE AMOUNT WILL BE CHARGED, SUBJECT TO A MINIMUM OF £1,750,
ON A NO MORTGAGE NO FEE BASIS THE OVERALL COST FOR COMPARISON IS 9.2% APR.

So with mortgage rates at around 6% and unsecured personal loans at about 7% why not ask your bank or current mortgage company first ?

(Disclaimer: these are my personal thoughts and should not be taken as financial advice of any kind)

[lea2001gb]

I did a consolidation loan in 2002 with HFC. It was unsecured as I insisted that it was this way. They allowed it but gave me a smaller amount. Little did I know, they went behind my back to a court and had it changed to a secured loan. I had no knowledge of this until I came to pay it off in an IVA. Apparently there was nothing I could do about it, so these companies can go to the court, behind your back, and change it from an unsecured to a secured without you knowing!!!

Disgusting

[www.infoebookstore.co.uk]

Originally Posted by lea2001gb

I did a consolidation loan in 2002 with HFC. It was unsecured as I insisted that it was this way. They allowed it but gave me a smaller amount. Little did I know, they went behind my back to a court and had it changed to a secured loan. I had no knowledge of this until I came to pay it off in an IVA. Apparently there was nothing I could do about it, so these companies can go to the court, behind your back, and change it from an unsecured to a secured without you knowing!!!

Disgusting

I can't believe that, how on earth can they legally do something like that?

Does anyone else have knowledge of something like that happening?

Jim

[Ian J]

Originally Posted by lea2001gb

I did a consolidation loan in 2002 with HFC. It was unsecured as I insisted that it was this way. They allowed it but gave me a smaller amount. Little did I know, they went behind my back to a court and had it changed to a secured loan.

I missed this when it was first posted. How can a lender change an unsecured loan into a secured one without your knowledge or permission as you would have needed to agree to and sign a charge on your home - and if you are married your wife would have had to sign it to.

If what you are saying is true then every credit card and bank overdraft provider would be able to do the same.

[fisicx]

There is already evidence that they do this. I can't find the report but it appears that the bank can change your loan, overdraft, credit agreements and so on without telling you. It's only when they get found out that trouble ensues.

A story on the Today programme discovered that the bank had changed the repayment conditions of a bloke after the CCJ ruled on how he was to pay off his debts. The bank increased the debt to 'cover administration costs' asnd had even doctored the signed documents to cover up the change!

If I can find the report I'll post the link.

[Ian J]

A bank may be able to change the terms of a loan but they cannot take security without either the lendee's permission or a court order in the case of default and the lendee will be notified of the impending proceedings and given a chance to defend them

[deborah]

The upside of these is, just about every mortgage taken out through a broker prior to 1998 has a claim for mis selling. This could range from £5,000 to the agreement actually being voided. So all these loan sharks that were charging exhorbitant fees may now have to pay them all back!.
Wouldn't that be nice?

[Alby]

It is not possible for a lender to put a charge or sometimes called a charging order onto your property without either the client authority or court order, as ian states above. Any unsecured loan can be essentially turned into a secured loan by placing a charge on your property, that is why it is usually easier to get a loan if you are a homeowner, they have some security for backup.

[Eagle]

Originally Posted by lea2001gb

I did a consolidation loan in 2002 with HFC. It was unsecured as I insisted that it was this way. They allowed it but gave me a smaller amount. Little did I know, they went behind my back to a court and had it changed to a secured loan. I had no knowledge of this until I came to pay it off in an IVA. Apparently there was nothing I could do about it, so these companies can go to the court, behind your back, and change it from an unsecured to a secured without you knowing!!!

Disgusting

That's outrageous!

[M1ck]

As stated in other post, secured loans should be considered as a very last option. Apart from putting your property ? Home at risk, they are very expensive (interest rates and fees)

Mick