Case study: Debt consolidation loan for couple with £91k of unsecured debt

The Problem

After unknowingly employing a rogue builder to develop an extension on their home; a couple accrued £91,000 worth of debt on their credit cards trying to resolve the situation.

The rogue builder, who had requested to be paid upfront for the work abandoned the job after a few days, leaving the extension unfinished and in a mess. To rectify the situation, the couple had to employ a new set of builders to redo the unfinished extension and pay for all new materials. Affording the extra work resulted in them using their credit cards to cover all of the additional costs.

As charges on credit cards are normally higher than a loan, the couple decided to explore other options which would allow them to consolidate their debts and reduce the monthly cost. Unfortunately, their current mortgage lender wouldn’t allow them to borrow more because their credit card balances were very high. Remortgaging with another lender was also difficult because part of the couple’s income was from long-term benefits and they would be charged expensive early repayment charges by their current lender.

The couple contacted a local Mortgage and Protection Adviser to see if there was anything they could do.

The Solution

The Mortgage Adviser used second charge sourcing system, LoansBrain, to explore whether a second charge mortgage would be a viable option.

He recommended that a second charge mortgage would allow the couple to borrow £91,000 to pay off all of their credit cards, without affecting their current mortgage. With rates and criteria for second charges currently really competitive, the loan would reduce the couple’s debt by an impressive £1,750 per month.

The Mortgage Adviser referred the case to second charge specialist, Jenny Harte, to process. From the initial telephone consultation with Jenny, to the loan being completed, the whole process took just two weeks.

For more information on second charge mortgages for debt consolidation or any other legal purpose, call our Specialist Team on 01702 538 800 or arrange a callback.

This case study is for illustrative purposes only.