loan company wont help

sarahxx_3

hi just looking for some advice my sister took a loan out about 4 years ago for about 3500 she never missed a payment and payed on time she lost her job and still carried on paying untill she had her first child who is 2 now last year she phoned and offered what she could aford witch she pays but evrey 6 months they take a large sum out of her account and she has to phone up to get it back and re do her aggrement but she had a loan statement this week and she now owes them nealy 5000 she phoned them and they said she does not meet the criterera to stop the intrest wat can she do about this as she will never be out of debt and the loan just keeps going up thanks

Tixy

Hi Sarah

I assume the loan is with the same bank as her current account and that is how they are taking out a lump sum? If so she should consider moving her current account to a bank she doesn't owe any money to - if she hasn't got a good credit history then she should ask for a basic bank account as they don't have credit checks.

Is she still out of work?
Has she written to them including an income & expenditure account and asked them to accept reduced payments and freeze the interest? Most creditors will not freeze interest unless they have seen an income & expenditure but some will when they have seen one and are satisfied she can't afford more. Usually a letter will be more sucessful than a telephone call (as it may be dealt with by someone with more authority)

Has she spoken to one of the free debt advice groups? - http://www.moneysavingexpert.com/loans/debt-help-plan#help

Does she have other unsecured debts she is struggling to pay?