Paying a loan off in full settlement

nomoneytoday

trooperboo wrote: »

Now, on this statment it says that we still owe £9977.43. I have since made (or will have by the end of this month) repayments of £1609.64. That leaves a balance of £8367.79. I want to pay £5K in full settlment, or £6K at the absolute most.

The balance will be above the 8367.79 as there will be interest payable between October and January added. Assuming a settlement figure of between £8500 - 9000 there is no way they will accept £6000 without trashing your credit report

trooperboo

Hi everyone........well here's an update for you.

I have spent all morning and most of the afternoon sorting this one out, and it began with a visit to the citizens advice beaurea. They felt that on the amount outstanding, it was highly unlikely that the lender would REFUSE a £6K settlement and that it was more than worth talking to them, adding that the only fly in the ointment was that they did not know how it would impact our credit rating.

So, i made more enquries when i got back. i spoke to Equifax and my lender. The person i spoke to at the loan company was really helpful and talked me through the whole process and told me what i had to do to submit my offer. They said they would then consider our offer.

If accepted, as far as our credit file goes, THIS was the gamble; our file would show as SATISFIED, but with a note to say that it was settleted with a lesser amount than originally agreed. This means -and both the lender and Equifax said the exact same thing- that a potential new lender would look at our credit file and see a SATISFIED debt that was satisfied in this fashion, and THEN decide if that was suffcient grounds to decline us finance. Note that this does not mean our credit file is "trashed" for "years" as has previously been stated in some of the replies here. Added to which, Equifax said we were well within our rights to add a note ourselves to state why we had paid off the loan with a smaller amount.

It was said -again by the lender and Equifax- that there was no doubt at all that a loan which had been "satisfied" with such a comment as likley to be left by the lender (see above) would leave a future lender in no doubt at all that we as the debtor were heading for a potential fall and -whilst we had taken action to prevent this before it happened- would indicate where the loan may ulitmatly have been heading. This would be taken into consideration by the next lender BUT it does NOT mean we would be immediatly refused credit, especially as we are fortunate to have a really good credit rating as it is.

And this is where i get a bit worn down......yes, i did ask for advice on here and yes, i did say it would all be gratefully received - and it has. But lets look at some of the comments; i was absolutly petrified by comments of 'trashed' credit ratings and suggestions that i was having a laugh but wanting to know if the lender would take what was on offer. Equifax said that it takes 6 months of non-payment for a debt to even be considered a 'default' and agreed with me that my payments with all my bills and accounts are excellent.

So what did we decide to do? Well, my parents are going to lend me £5K to pay back as and when we can afford it, we ourselves are going to add £1K to that, and the remainder of the balance - which i have had confirmed will be just shy of £2700. For that amount we have decided it is not worth going through the hassle of applying to see if our offer will be accepted and the risk of have a "settled with comments" on our credit file. But believe me, were it more than say £3.5K then we'd have had to do that.

So, we will add to a credit card the remaining £2700, so that we can pay back as much of it as we can afford, as and when we get it coming in. Well done to the person who suggested that, and yes, we will look for a reallly low -preferable 0%- deal to put this money on.

We are not stupid people. We are far from work shy. But life has been very hard to us of late, just like it has to millions of others. Things happen, that's life. But from some of the replies, I just feel like i have portrayed us as being work shy and greedy

jamesd

It's clear to me at leas that you are neither work shy nor greedy, just trying to deal with an unpleasant situation. Good luck with the solution you're using!

minimadtrix

trooperboo wrote: »

So, we will add to a credit card the remaining £2700, so that we can pay back as much of it as we can afford, as and when we get it coming in. Well done to the person who suggested that, and yes, we will look for a reallly low -preferable 0%- deal to put this money on.

Oooh, that we me:j:T

On a serious note, I'm pleased you've been able to come to a sensible conclusion, having weighed up your options. I wish you luck for the future - with the loan, credit card application and more importantly getting back into full time employment