Consolidation an Option?

Hi all,

I recently bought a house and ended up hammering the credit card somewhat, I have an existing loan with my bank for about €16K. What I would like to do is top-up my loan somewhat and clear the credit card which currently stands at around €6K. I don't know why but I seem to recall a conversation with someone that basically banks don't like to provide loans to pay off existing debts (i.e. credit card), Can anyone confirm this?

For the record, I have had a spotless record with the bank with regards loan re-payments and I earn good money, I just don't like the credit card looming over me. The only reason it is so high is due to the new house.

Any information would be appreciated.
Thanks

mfusco said:

I recently bought a house

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What is it worth, how much is outstanding on the mortgage, what rate, term etc.?

and ended up hammering the credit card somewhat. I have an existing loan with my bank for about €16K.

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So you have €22K in unsecured personal/CC debts in addition to the mortgage? What rates are charged on these?

What I would like to do is top-up my loan somewhat and clear the credit card which currently stands at around €6K.

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And the €16K unsecured loan? Remember that if you do this you should really only do it as a once off measure to restructure your finances and ideally clear the topup within the same sort of term as the original debts (e.g. a number of years rather than a number of decades or the full remaining term of the mortgage).

I don't know why but I seem to recall a conversation with someone that basically banks don't like to provide loans to pay off existing debts (i.e. credit card), Can anyone confirm this?

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Depends on the lender.

Some Credit Card providers are offering interest free transfers for credit cards for the first 6 months. This would give you a chance to get some of it paid off in 6 months. You will be paying interest on a loan if you top it up. Ulster Bank are doing this offer and Im sure the likes of Halifax are too maybe give that a try for 6 months and look at your options again

ClubMan said:

Remember that if you do this you should really only do it as a once off measure to restructure your finances and ideally clear the topup within the same sort of term as the original debts (e.g. a number of years rather than a number of decades or the full remaining term of the mortgage).

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I think the OP was looking at a consolidation loan (e.g. new unsecured loan for €22k to replace the existing loan and CC) rather than a mortgage top up.

However, if the topup was an option (and cleared early as per the advice from CM) the topup option (if available) might provide a saving.

I wouldn't worry about what someone "told you". The bank will make a decision based on your current income, current outgoings (possibly high given the mortgage) and risk in being able to service the loan (other factors such as ICB report will figure in the credit rating produced, but this is all behind closed doors so tough for people to comment with authority).