Managed loan Do I dont I?

rainy233

Hi all I know there is prob already threads on here relating to this but I am new and stuck as to what to do regarding HSBC my husband has been made redundant due to a back operation and I work part time on a low income I have a loan with HSBC and couldnt make the monthly repayments so after going from £240 pm they allowed me to reduce to £150 for three months under the circumstances nothing has got better as yet so they now say I cannot pay 150 pm and should do this managed loan over 12 years at 0% whilst am in circumstances when husband back at work or I earn more etc then will add interest at 12.10% variable on doing the maths of what they would expect me to pay it pretty much doubles the loan. It obviously works well while income low but hoping wont always be like this. Sorry it is long and drawn out just really need some advice before I sign anything Thanks in advance Lorraine

marshallka

rainy233 wrote: »

Hi all I know there is prob already threads on here relating to this but I am new and stuck as to what to do regarding HSBC my husband has been made redundant due to a back operation and I work part time on a low income I have a loan with HSBC and couldnt make the monthly repayments so after going from £240 pm they allowed me to reduce to £150 for three months under the circumstances nothing has got better as yet so they now say I cannot pay 150 pm and should do this managed loan over 12 years at 0% whilst am in circumstances when husband back at work or I earn more etc then will add interest at 12.10% variable on doing the maths of what they would expect me to pay it pretty much doubles the loan. It obviously works well while income low but hoping wont always be like this. Sorry it is long and drawn out just really need some advice before I sign anything Thanks in advance Lorraine

Did you have any insurance on the loan??

rainy233

hi no i didnt as work under 15 hours

CLAPTON

The issue here is, if you refuse the managed loan then what is the alternative?

If they are willing simply to allow you to continue paying 150 and freezing the interest then that would be good. However, I doubt they will do that for very long.
What is the future prospects for your family income... if your OH can return to work or if you can increase your income in the near future, then maybe you could persuade then to continue as you are until the extra money flows in.

In reality 12.10% is not a very high APR by todays standards. You would be unlikely to get a cheaper one in your current circumstances. If you agreed to this presumably you could always overpay in the future and hence reduce the total interest payable.

rainy233

Well I have 2 young kids so my hours will not increase yet but husband will def be in work asap I think I will go for the managed loan like you say the interest not too bad.They have said I can pay £60 interest free per month until income increases if I was to pay this for say 2 years and then when reviewed my minimum payment goes up and interest is now added would I be charged the interest on just the amount remaining or would it be the whole amount? Hope it makes sense confused myself lol thanks

milliemonster

You do realise a managed loan turns your current account into a solo account so you have to give up your cheque book and they cancel your overdrafts also, if you ae aware of this and are happy then that's fine

rainy233

Hi yes i dont mind that it will cosolidate loan o/draft and credit card. Do you know about the interest part i posted in last question thanks again

kevinelly

Have only just read your post today. I would be very wary of signing up to the managed loan. I was signed onto one 4 years ago. At the time I asked if I would be able to move onto a mainstream loan once my account was in better order and was told this would be ok. Now that my account is in good order they wont move my loan over. I have made payments over £11,700 in this time and the balance has reduced by only approx £1500 on an £18,500 loan. I would be surprised if the interest is as you say it is. I have found that I have been paying about 19%APR. The interest is usually about 10.9% above bank base rate.
The payment is fixed and the loan is said to be over a fixed period. However, I have now been told that because interest rates have been rising over the period of the loan I could still be left with a substantial debt at the end of the 'fixed term'.
I have been told that I could have been making additional payments but no body told me about that when the loan was agreed/forced.
I have complained to Financial Ombudsman - ongoing.
You really should be taking proper advice and exploring all avenues.