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Page 18: Financial: Consolidation/Homeowner Loans.

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The worst part of daytime TV in the UK isn't the awful "celebrity chef" programmes, nor is it the multitude of audience debate shows always titled with the hosts first name. The worst thing, as any recovering sick worker will tell you, is the ADVERTS. The worst of these darlings of daytime TV are the following three types of company that rarely have the audacity, or the funds, to reappear at prime-time:

  • Consolidation or homeowner loans.
  • "No-win-no-fee" accident claims firms.
  • Walk-in baths for the elderly or infirm.

The Credit Broker Company.

Whilst the "No-win-no-fee" and walk-in-bath brigades are at best curiosity objects, the consolidation or homeowner loans companies concern us here at the Surgery. All of these adverts have obviously been made on a very tight budget, most of their marketing funding seems to have been spent on the "D" list celebrity that hosts the ad, usually an obscure actor from a 70's sitcom whose face you know but haven't seen since the 70's. What you won't have heard of are the companies being promoted.

Adverts from credit brokers offering consolidation or homeowner loans are targetted at people who have been turned down at banks and building societies. These loans differ from personal or unsecured loans in that they are secured on the home of the applicant. Should the applicant default, their home is at risk. The message from the companies: "If you are having difficulty with existing debts or getting the cash you need, try us because we won't turn you down". People with a bad credit history, the self-employed, divorced or retired may feel that they have nobody else left to turn to other than credit brokers like this offering Homeowner or Consolidation Loans.

Consolidation or Homeowner loans.

A credit broker arranges loans from a number of lenders, primarily for people seeking to consolidate existing loans. They make their money by getting commission on arranging the loan. Here are some MoneySurgery Vital Signs for Consolidation/Homeowner loans:

  • As we stated, previously, the loan is secured on the home of the applicant, so if you fail to keep up repayments, you may end up losing your home.
  • Some companies take 10%, so that on a £20,000 loan, customers pay back £22,000 and get charged interest on the loan AND the FEE.
  • Rates are high for those with a bad credit history, and the cost of the loan is spread over a greater length of time than a normal bank loan, sometimes as long as 25 years, so the total interest paid multiplies.
  • Redemption penalties can be enormous with people feeling trapped into continuing the payments.
  • Some companies charge around double what high street banks charge for payment protection insurance, possibly because of the poor financial standing of customers who use these firms.

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At the Surgery, we like Consolidation loans, as long as they are the "unsecured" type. Putting all your outstanding debts like credit cards, car loans, overdrafts in one big pot can be sensible, allowing the debtor CONTROL over their debts, the first step on the way back to having no debts at all. However, how many of us can resist using that old credit card or going overdrawn again? Many people who get a consolidation loan continue to rack up other debts and can wind-up worse off than before, requiring consolidation loans on their consolidation loans!

Consolidation loans can only be used as part of a total reorganisation of ones lifestyle and finances which includes cutting up credit cards and keeping a roof over ones head at all costs. No buts. Its the ONLY way. With the help of MoneySurgery, you can make that change as painless as possible. Your anaesthetic is the knowledge that one day all your debts WILL be GONE. We are your Nicotine Patch. We are your crutch. And you can do it.

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