Personal loan repayments

laura2525

Hi everyone, I'm a new member to this, and not v familiar with forums and stuff, so please bear with me!!

Basically, I was wondering if anyone might be able to give me some advice on my current situation. I am 24, and at the beginning of this year took out a 5k personal loan with my bank (repayment 155pcm over 5 years) to repay my credit cards etc. A couple of months ago, I then took out an extension of a further 5k for cosmetic surgery (repayment now 216pcm over 7 years).

I've now decided not to go ahead with the surgery, and have since left my job. I'm now going back to education this Sept to train to become a nurse, and to cut a long story short, I can't afford the loan repayments while studying. I do have £3700 of the loan left (I had to use part of the loan extension to cover living costs after leaving my job and also had a bit of a home emergency that had to be paid for).

Should I give the bank the £3700 back, and tell them I can't afford to repay the full monthly payments on the remainder, and see if they will come to some sort of arrangement with me to reduce the payments until after I've finished my studies in 3 years time? I don't know how likely it is that they'd agree to this? Any ideas?

My other option is using the remainder of the loan to cover the monthly repayments, but this would only be enough to keep me going for about a year, after which time I'm going to be in the same boat...

I'm really stuck!

Any help/advice would be greatly, greatly appreciated.

Thanks, Laura
(sorry for the ridiculously long post!)

tictax

Hi Laura and welcome to the forum.

First of all the fact that you haven't used the £3700 is irrelevant. You could use this to make a large payment toward the loan and reduce the outstanding balance.

Will the bank reduce the repyments for three years? I really can't see it banks will only agree to reduced payments for short periods of time before wanting the payments to go back to the contracted amounts.

Have you thought through all of the costs associated with going back into full-time education? How will you pay rent, household bills and general living expenses whilst studying? Will you be getting a part-time job?

You say that you took out the extension loan only a couple of months ago. Without wanting to sound harsh have you really seriously thought about this course? I appreciate a lot can happen in couple of months but if you were planning to start a nursing course in September you must have given it some thought at the time of taking out the loan.

standupguy

Speak to your Bank and just be honest about what has happened and ask what they can suggest to help?

As it is unsecured they will be thinking that they will have to make a bad debt provision but will be eyeing the fact that they can get £3700 back in to reduce any potential losses ( that is if they care about protecting the Banks assets)

So, why not try a bit of negotiation with them where you are helping each other?

Eg, if you repay £3700 now what can they do to reduce your payments / interest etc?

Do not use the rest of the loan to make the repayments - that is just putting off the inevitable?

It needs sorting, if you can, otherwise it is a slippery slope that can take many years to recover from and will leave you at the mercy of the sub prime lenders in future.