Offer to repay loan

Statto99

Hi all, I'm hoping somebody might be able to help me with a query.

A family member has a loan with a current outstanding balance of approx £2k. His loan company have recently written to him out of the blue offering him the opportunity to settle his loan account for 50% of the outstanding balance (£1k). He has until middle of July to accept this offer and pay the money.

He has had problems paying the monthly repayments and has missed payments in the past. He is also currently unemployed and has been for 6 to 12 months.

Why would the loan company make him this offer?

mrcow

Who are the loan company? Are they a "reputable" lender?

They may be hoping for a full and final because they think he's at risk of going on a managed payment plan given that he's missed payments.

Statto99

mrcow wrote: »

Who are the loan company? Are they a "reputable" lender?

They may be hoping for a full and final because they think he's at risk of going on a managed payment plan given that he's missed payments.

Yeah, they are reputable, can't remember who it is off the top of my head though.

I suspected that it could be something along those lines, re-assessing the risk of some of their customers and trying to get some money before losing the lot. Wasn'nt sure if this was something that lenders did/were doing in the current environment.

mrcow

Just make sure that he gets everything in writing - including that it will 100% be a full and final and that he will have no obligations to them once payment has been made.

Statto99

Thanks for the advice

david39

Yes, when he pays them do it by cheque and make sure he states in the accompanying correspondence that it is "in full and final settlement of...... (loan details)......" and that he keeps a copy. Others here might comment on the advisibility of writing it on the back of the cheque.

Then, if they cash the cheque, they cannot come back to him for further money because cashing the cheque means, in law, that they have agreed to the terms that accompanied it.

Scottish Widows tried this on with me a few years back where I was disputing a withheld annuity and said I wanted interest for the period it was witheld. They acknowledged my complaint with a letter and a cheque for £25 as compensation for the delay but included in the wording of the letter was that it was in full and final settlement of my complaint. I returned the cheque on the grounds that they still had not resolved the complaint which they could drag on for months. Had I cashed the cheque, my ability to recover the true interest value would have been nullified - and they would have had no incentive to clear the matter up quickly either.

It took a letter to the CEO to get them to move in the end. He sorted it in 10 days.