# suspicious of bank help



## blackgold (21 Aug 2011)

I was offered a new loan last week by bank to pay off my outstanding debt on my credit card and my overdraft. 
I know that the rate on the new loan is fixed and that in the long run it will save me money as interest rate on credit card debt is very high. I can afford to pay the new loan and will have clear credit card with much lower amount available to me..and will have my overdraft cleared. And I do not intend to use my credit card unless I can pay the amount in full each month. 

However I am deeply suspicious of banks. as we all know it is always to their benefit and not the customers ..especially when they offer you something that you didnt actually ask for...

Some advice needed please.


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## rubyred (22 Aug 2011)

Are you actually serious??
If the banks didn't offer to point a customer in right direction the customer gives out - if a person in bank makes suggestion to the customer to save the customer the interest compared to credit card and overdraft to loan they still give out it's a joke!! Read your terms and conditions of the loan if your not happy don't sign simple as no ones making you take the loan all they did was make you aware!!


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## hastalavista (22 Aug 2011)

what's not clear here from the post is if the OP has other debt such as a mortgage and this new loan is cross secured on the gaff. read the small print

Equally its not clear if this came out of the blue without any prompting from the OP
Finally there is drive to reduce /remove overdrafts from the equation as they cause funding problems for the banks: a term loan is fully funded, one less item to worry about


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## blackgold (22 Aug 2011)

Thank you both for your replies. Actually I am serious considering the bad advice handed out by banks in the past and the number of people who would have been better off not listening to them, I have ever reason to be suspicious...

Yes this offer came out of the blue. I happened to go to the bank for another reason and while talking to one of the girls she suggested this loan to me..
As you point out hastalasvista I imagined that there is a policy within the banks at present to reduce/remove overdrafts.
But in times gone by there were other policies within the banks which were not honourable...so this is why I am always going to be suspicious of offers...
Anyway thanks for your comments


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## Commercial (22 Aug 2011)

I recently cleared 3 overdrafts and put onto 2 term loans. It was a lower rate and the repayments are not too bad.
However, they left me with very little in my current account after promising to leave me with €1k in 2 accounts and this is going to leave me tight for a few months.
Not happy with that, but with a lower rate and knowing my debt is reducing slowly it is a plan put in place for me.
My rate is variable which enables me to put lump sums in if I get them, which is good too.


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## Mongola (23 Aug 2011)

ALthough not asked, my advice would be to cut up the credit card but only keep the digits so that you can still book flights online but you can actually shop with it. How many times have i heard people doing what you are doing but ending up with not only a loan which, originally, was to clear CC &/or overdrafts but also a maxed out CC again. 

If you are suspicious of their offer: you can say no after all.


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## toby2449 (23 Aug 2011)

Basically the bank have offered you a way out. Credit cards are woefully difficult to pay off (especially if it has a very high balance - which i assume it has). So the bank could be thinking that atleast this way they will see a return of the amount borrowed. However as someone mentioned earlier be careful your new loan isn't secured on your home! Credit cards are unsecured loans, very difficult for banks to recover money owed if payments stops (hence why Bank Of America is selling MBNA). If you default on your credit card payments banks generally have to come to some sort of payment agreement, however any new loan might be secured so if you default the bank takes what they need to re-coup the money!


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## blackgold (29 Aug 2011)

Thank you to all of the above for the advice..


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## steevo51 (30 Aug 2011)

Once the loan is not secured you should take it. Make sure you cut up and cancel your credit card if you take the loan out. 

There are plenty of places to get pre paid credit cards if you need one and this way you don't run up a bill, I suggest paying €10 or €20 on to it a week so you can use it when you need.


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