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Mortgage Lenders Charge for Debt Advice

If you find yourself in arrears with you mortgage, your mortgage provider could offer you debt advice, however, you need to be aware that if you go down this route as a way to try and resolve your financial difficulties, you may be charged.

Halifax, GMAC-RFC, Nationwide, Lloyds TSB, Abbey and Northern Rock all charge fees for their debt councelling services.

Critics have accused the lenders of making things worse for borrowers and driving them further into debt by charging fees for advice on how to deal with their situation. Moira Haynes from Citizens Advices says:

Insisting that people see a debt councellor appointed by their lender and then charging them a hefty fee for the privilege is just a recipe for driving people deeper into debt.

It’s bad practice and should be stamped out. Banks and other lenders should instead be urging customers with credit debt or mortage arrears to get free and independant debt advice

Charges for referring you to a debt councellor are as follows:

Halifax – £100
GMAC-RFC – £100
Nationwide – £95
Lloyds TSB – £94
Abbey – £80
Northern Rock say their charges vary

Lenders say that it is not compulsary for people to take up their debt councelling service and it is treated as a last resort, however, it does seem wrong for these companies to charge for debt advice in the first place rather than refer their customers to non-fee charging companies who will give you this advice for free.

If you find yourself in arrears with your mortage, or you are struggling with your finances and keeping up with your repayments to your creditors, then seek advice from a non-fee charging debt advice company such as ourselves (Payplan), you can call us for free on 0800 280 2816.

Written by tani on September 6th, 2007

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