Bad Credit Loan

Shilbottle

I'm posting this on behalf of my brother, who is in a bit of trouble with HSBC. When he left uni, they informed him that he needed to pay off his student overdraft and credit card immediately, and offered him a managed loan of £3500 with monthly payments of £150.

He has a job earning just under £1000 pcm, and doesn't have much left at the end of every month, but he managed to meet the payments for a while by juggling things around. For the last 6 months however, he has been borrowing from me and my father to make these payments, and we have simply run out of money to help him. He kept in touch with HSBC, explaining the situation and they allowed him a repayment holiday of sorts, reducing the payments by half for a few months. However, he received a letter the other week stating that he must now pay the outstanding half-payments £225 or they will cancel the agreement and call in the whole loan.

He went to see them to explain that he didn't have this money but they were admanent that this was the case. Yesterday he received another letter re-stating the above. He doesn't have this money but really doesn't want to just sit there and wait for a CCJ. He desperately wants to get control over things again, but that means getting a different loan. When we got his credit file, we discovered an old default from British Gas which means that his credit rating is Very Poor. We don't believe the default to be correct but it will take time to sort that out and in the meantime, he needs to sort out his debt with HSBC.

Can anyone recommend a company that will lend to people with poor credit? Or offer advise for any other course of action?

SOA
HSBC Managed Loan - approx. £2,700 (outstanding balance)
British gas default - £193

Ames

I really don't think another loan is the answer. I think we need more info, like does he live on his own or with parents. If he could do an SOA (statement of affairs, see here http://www.makesenseofcards.com/soacalc.html ) then it'll be much easier for people to give the best advice.

Shilbottle

SOA
Income - £1000 pcm

Rent - £180 pcm
Mobile - £70 (no landline)
Electricity - £40 (meter)
Council Tax - £60
Insurance - £6
Internet - £10
Sky - £20
Loan - £150
Travel - £200
Food - £289

He has just moved in with his girlfriend, and has taken on half of all the bills. He works nights at a casino and they get paid weekly.

RAS

Hi

I would reccomend that he talks to one of the debt charities urgently and does an SOA as well; he will need that for the debt charity anyway.

Unfortunately, the fact that this is a managed loan makes things more difficult as he has given them carte blanche to do what they want.

Can you advise whether he still has a current account with them? If so, he needs to get another one and move his pay into the new account ASAP.

skintandscared_2

Shilbottle wrote: »

SOA
Income - £1000 pcm

Rent - £180 pcm
Mobile - £70 (no landline) THIS IS A HUUUGE BILL! Switch to PAYG
Electricity - £40 (meter)
Council Tax - £60
Insurance - £6
Internet - £10
Sky - £20 CANCEL AND GET FREE DIGIBOX
Loan - £150
Travel - £200
Food - £289 IS THIS JUST HIS HALF OF THE FOOD BILL?? I shop for 2 (inc food, toiletries and cleaning stuff) for a max of £50 a week. Trying to get this down further.

He has just moved in with his girlfriend, and has taken on half of all the bills. He works nights at a casino and they get paid weekly.

Few ideas above. With a few wiser shopping choices I don't think he'd have a problem living within his means and being able to pay off the loan. Taking out another loan is DEFINITELY not a good idea.

phil80

Rent £180
Mobile £70 (cant he get a landline will be cheaper)
Electricity £40
Council Tax £60
Insurance £6 (what is this for)
Internet £10
Sky £20 (He can get a freeview box)
Loan £150
Travel £200 (seems rather high)
Food £289 (again seems very high)

Shilbottle

Yes, his current account is with HSBC as well, but I wasn't sure if he'd be able to get another bank account with such a bad credit history.

Food - he said £70 a week for his food bill. He's a big guy and has always needed to eat lots, but I think the fact that he works nights means that there are a lot of convenience options in there.

Sky - I mentioned this to him (as I consider it a luxury) but he said he felt he couldn't ask his girlfriend to cancel her subscription on his behalf.

I too felt that another loan wasn't the best idea, but the fact of the matter is that he originally agreed a repayment that he couldn't manage. He's had some personal problems and has always been a head-in-the-sand kind of guy anyway, but with HSBC unwilling to mess about with this any further (no reason why they should) I can only see him ending up with lower payments through a CCJ.

milliemonster

He needs to get his priorities right, if he wants to avoid a CCJ then this calls for desperate measures, he has to come clean with his girlfriend and explain he can't contribute to Sky at the moment, £70 a week food for one person is a heck of a lot, this needs to be at least halved for the time being he needs to cut this down, his mobile is £70 a month???? get rid of it and get a PAYG, this will free up the money to pay the debt, the last thing he needs is another loan until he learns to make some serious cutbacks

If he gets a CCJ, they will want to see his outgoings before they set a repayment, they won't accept a mobile bill of £70, food of £70 a week etc ete, he could still find he ends up with a large repayment and a CCJ to go with it, he needs to make the cuts now

LilacPixie

totally agree with millie. Plus big guy or not he could fill up on pastas etc and still be alot less than £70 a week shopping.

RAS

And for heavens sake he MUST get new bank account - even if it is a basic one with no credit check required, with a bank that is not associated with HSBC.

Otherwise HSBC are quite within their rights to take his next salary payment and set it against his loan and leave him with nothing to live off for the month.

he will get a card, and can pay out DDs and SOs even from a basic account.

What has he got that he can sell via amazon, ebay and posibly a car boot sale?

The other option is that he moves back home, which will reduce his expenditure (if DAD will have him).

And the pair of you have to stop subbing him or he will not tackle this.

Shilbottle

Yeah, that has been the main issue. It has become clear that he'd much rather keep asking us for money than deal with the problem directly so I have now made it clear that the only help I can give him now is advice. He's 24 and if he doesn't handle this himself then he'll forever be in a situation where he can't get credit and can't manage his own finances, which perpetuates the 'bank of Dad' scenario. We all live in different areas of the country and he doesn't want to leave his girlfriend, so he won't move home unless she kicks him out.

Unfortunately, living 200 miles away from him means it's very hard to push any course of action because it always boils down to him making the effort/phonecall etc.

Thanks for the advice everyone!