Settle loan early with reduced amount

Matt_the_hat_2

Hi

I have quite a bit of mixed debt, cards & loans including one (loan) with Northern Rock.

I can afford my monthly repayments but want to reduce the debt as quickly as possible. I have just received a bonus at work of £1,500 after tax and was going to use it towards my highest interest rate c/card. But I was wondering if I made an offer to Northern Rock of £1,500 in full settlement of a loan with £3,100 outstanding whether a) they would be likely to accept & b) if they did would it effect my credit history in anyway?

thanks

MTH

Rafter

Matt,

Why on earth would they settle when you are currently making payments?

If you were in serious arrears then maybe, but you would have defaulted by then.

I suggest you follow your original plan, pay off your expensive credit card with your bonus and the payment you have saved on that card, add to your payments on other cards. This is called snowballing and should mean you get your overall debts down.

Just because Northern Rock is government owned, doesn't mean they are any more charitable to borrowers or more likely to accept offers.

R.

anotherpaul_2

Matt_the_hat wrote: »

a) they would be likely to accept

If you're not in significant arrear, not a chance. Why would they? Unless they think you will never pay it back, they're happy to wait for their money rather than give you a huge discount.

Matt_the_hat wrote: »

b) if they did would it effect my credit history in anyway?

Yes it would, but see a)

Robert_Sterling_3

Not a chance in a million.
Why would they?
Why should they?

Matt_the_hat_2

I asked because I heard a radio programme and a caller said he had done it. Perhaps he was not being honest.

Robert_Sterling_3

Heaven forbid.

anotherpaul_2

Matt_the_hat wrote: »

I asked because I heard a radio programme and a caller said he had done it. Perhaps he was not being honest.

I would suspect he was at least glossing over the background information.

peopleshares

Hello everyone

You were most supportive to me last time. I wonder if anyone can shed light on this.............

I have personal credit card debts to settle, but am approaching the time that I will not even be able to make the minimum payments. I have spoken to the cc companies involved and they tell me that I can settle at 90% of the full amount without having an adverse credit score. They say any offer below 90% is subject to a bad credit rating. Can anyone tell me if this is universal policy by cc companies, or just a scare tactic. Also, do you have to be in arrears before they will accept a full and final offer? Any examples people would like to share? MBNA and Barclaycard experiences would be most welcome.

Also will it help to mention that our business became insolvent and that we are at the end of paying settlements on business loans and are now out of cash and on a tight budget, or will this hinder our personal situation?

Thanks for listening - I look forward to your feedback Peopleshares