Personal Finance

Debt Buster Loans

My daughter (23) split up with her boyfriend and moved back in with my wife and I and she came with a fair bit of debt. She took out a bank loan to buy a car (needed for her job) and clear off some of this outstanding debt, but she has since had to take out a further bank loan to help with the mounting debt.
She has a good job earning approx £23,000 per annum. A couple of her friends who are also very heavily in debt have told her to take out a "Debt Buster Loan" as advertised on TV, but I'm concerned that as she is now staying at our address then this will cause our address to be on some kind of credit blacklist or similar. Has anyone had any dealings with this type of loan and if so what are the benefits and pitfalls and will it give our house a bad credit rating. I've visions of my wife going into get new furniture/kitchen etc and getting knocked back for finance. Any help or comments would be appreciated.

dartagnon Tue 27/05/08 00:55

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Ice.Maiden
Tue 27/05/08
01:00

Providing all debts are paid on time, I can't see why your homre should be blacklisted.

Panic Button
Tue 27/05/08
01:04

Aren't they normally loans secured against a homeowners house?

I suggest she searches for the best rates on Martin Lewis's site:

http://www.moneysavingexpert.com/

themas
Tue 27/05/08
20:48

1. Debt Buster Loans seem to be what others call a consolidation loan - i.e. taking out one large debt to repay all the others you have. Often they are secured on your house, but not always. I think the phrase is just a (supposedly) nice sounding marketing ploy.

2. It is very rarely a good idea to try & get out of a debt problem by taking on more debt; it is almost never a good idea to go to companies who advertise their loan services on TV - they are likely to end up much more expensive than main stream lenders.

3. It would be much more sensible for her to go to a free debt advice agency, such as the local CAB, or CCCS (see website) & get suggestions from them about the best way to tackle the problem.

4. You do not need to worry about the house being blacklisted - Credit Reference Agencies now have to work on names of people & not addresses. The only link would be if you had a financial connection, such as a joint account. You could double check by getting your (& your wife's) credit records from the 3 agencies - Experian, Equifax, Call Credit (see websites).

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