It reserves the product you are applying for... Interest may still accrue on the balance outstanding so the exact terms should always be verified with the lender... For example, provider A supplies an unsecured loan, which pays off the overdraft on the current account provided by A and the balance of a credit card, which is also issued by A... http://www.debt-consolidation-loans-for-you.co.uk/loans
Many banks now operate a charge-free buffer zone, where slipping into the red for just a couple of days goes unpenalised... There are, therefore, a wide range of products that could, in principle, be used for loan including... Also, if you are planning to have a heavily discounted product, allow some leeway in your calculations for when the discounted offer ends... Almost all lending companies will check the information supplied on loans or mortgage applications with data held by credit reference agencies... http://www.loans-company-uk.co.uk/loans