Advice on Northern Rock Unsecured loan much appreciated!

d.g_5

Hi all

This is my first post on here, looking for a bit of advice really, hope you can help.

In late 2004 i took out a Together mortgage with my then wife through N.Rock, cutting a long story short we split up in 2008 and following a year long divorce i ended up keeping on the house -this was because the only option at the time was to sell up and owe the bank 25k plus, or spend thousands fighting her in the courts to recoup her responsible part of the unsecured element of the loan.

Anyway, I kept the house on thanks to my father who agreed to come on board with me as the 2nd party, so it was a case of remove my ex wifes name and put my fathers name in her place.

At this point the mortgage was on the std variable rate with N.rock but thanks to low interest rates was quite affordable. I knew this wouldnt last forever though and last summer i managed to get a new 75% mortgage in my name only, on a fixed rate with Alliance and Leicester until Oct 2011.

So, onto how things stand now:

I have around 25k on an unsecured loan with N.Rock, in mine and my fathers joint names. When i moved 75k away to remortgage they put the interest rate on the 25k up by 5% above their std variable rate, meaning the payments shot up considerably from around £160 per month to £250, this loan has a remaining 19 years and 9 months to run.

My logic that was should interest rates rise, it was a better exercise in damage limitation to have only 25k unsecured, rather than the full 100k i originally had borrowed with N.Rock.

Following the costs of the divorce, the change of parties and the remortgage (all within a year) I have just about got myself back on my feet financially, and in August last year i was lucky enough to get a promotion at work which raised my salary quite nicely.

So right now my concern is attacking this unsecured loan with N.Rock, I dread interest rate rises and to be honest have been constantly worrying about it for months now - as i am well aware my payments could rise further still.

I am 31, earning £35,200 per year and apart from the £75k secured mortgage with A&L i have around £4.5k in personal debt to clear, are there any options for me to shift this unsecured loan onto a better deal? Would i be better to try and shift a (large) portion of it somewhere?

I have been looking into personal loans but the market seems a little bleak to me at present! I think my credit rating was damaged a bit by my ex wife, as a result i have not been applying for cards etc for some time, late last year Barclaycard accepted me for a card so I am hoping my rating is on the mend now.

I would appreciate some advice, and am sorry to have waffled on, it just helps to explain how one ends up sitting here writing this! I also appreciate some may think i was stupid to take on the whole house in potential negative equity during a divorce, but anyone who has been through that will know sometimes you have to do things which you know are the only way out...

Many thanks

Dave

Rafter

Dave,

Ultimately you need somewhere to live and you have obviously been through a lot - I hope other posters will understand that.

As far as your unsecured loan goes, your main problem is going to be the term - nobody is going to offer you an unsecured loan over that kind of term fixed rate.

Your best option is going to be to tighten your belt as much as you can comfortably and start eating into this and your existing debt. Might mean a lifestyle change, but that seems to be the only way you are going to bring forward your debt free date and give yourself options if you do every want to sell up.

Might be worth filling out a statement of affairs (link below) and posting it on the debt free wannabe board. Also worth getting your credit rating from experian or equifax and see what is lurking. A copy of Martin's book (the Money Diet) might also give you some ideas. Register on quidco. Switch gas and electric suppliers if you can and just start looking at other ways to save cash.

Good luck

R.

http://www.makesenseofcards.com/soacalc.html

VIGILANT22

I think you should double check the tem of your loan as it used to be when you mortgaged away from NR but kept on the unsecured loan the interest changed (as you have documented) however the term also used to reduce to 7 years.

d.g_5

Rafter wrote: »

Dave,

Ultimately you need somewhere to live and you have obviously been through a lot - I hope other posters will understand that.

As far as your unsecured loan goes, your main problem is going to be the term - nobody is going to offer you an unsecured loan over that kind of term fixed rate.

Your best option is going to be to tighten your belt as much as you can comfortably and start eating into this and your existing debt. Might mean a lifestyle change, but that seems to be the only way you are going to bring forward your debt free date and give yourself options if you do every want to sell up.

Might be worth filling out a statement of affairs (link below) and posting it on the debt free wannabe board. Also worth getting your credit rating from experian or equifax and see what is lurking. A copy of Martin's book (the Money Diet) might also give you some ideas. Register on quidco. Switch gas and electric suppliers if you can and just start looking at other ways to save cash.

Good luck

R.

Thanks for the reply Rafter, I have been assigning myself to trying to overpay on this loan as it seems until it is down to a more manageable level my options may be very limited, I will have a look at getting the credit report - does it cost anything now?

Luckily I am quite good with money in other ways and have just switched energy suppliers etc, so its not all bad!

VIGILANT22 wrote: »

I think you should double check the tem of your loan as it used to be when you mortgaged away from NR but kept on the unsecured loan the interest changed (as you have documented) however the term also used to reduce to 7 years.

Thanks for the reply Vigilant22, I will definately check on that, but I am pretty sure the term remained unchanged.