first plus loan - any ideas or help!!

lynzpower

Felicity wrote:

I took out a loan when I first left uni and was unsure about my future earnings (commission based), it turns out I paid my loan off after 1 year instead of the 5 years I had originally signed up for and I had to pay a high redemption. I was gutted at that redemption charge in the end, but I couldn't blame anybody for it, certainly not the company I had taken the loan from. I was a risk (first job, no credit history etc) so the interest was high and the redemption was high but I needed (or wanted?) it at the time so I had to take it on the chin.


Good luck!

Actually, you might find under contract law, as many others are finding, that these redemption fees are not entirely legally enforceable.

honory

We were going to rent the house out whist in N.Z just in case it didn't work out. We were going to use some of the equity to help us move (we have bout £80k of equity in the house.) Do you think it's better to increase the mortgage and pay off first plus or save our overpayments and settle just before our N.Z move - we plan to leave in approx. 3 years time. Thanks for all the help and advice so far in this thread it helps to know we're not alone!

CLAPTON

dont know if this helps or hinders
but

a. if you keep the firstplus loan going then
you have 130 more payments to make of £500 each making a total still to pay of £65,000
(i'm taking initial loan period as 15 year (180 months) and you have already paid 50 leaving 130 still to pay)

b. if you remortgage and have to rise £35,000 to settle the firstplus debt, then to compare like with like, assume the mortgage over the same period of 130 months then you would pay
£45,000 if the mortgage was at 5% and monthly payments of £349 or
£47,000 if the mortgage was at 6% and monthly payments of £366 or
£50,000 if the mortgage was at 7% and monthly payment of £384

in practice if you remortgaged you would presumably repay over your current mortgage period and the sums would be slightly different....why not speak to your current mortgage lender to see what they will do?

i would try to remortgage now ....see what the best deals are although this may depend upon your credit rating......obviously there is no need to say never ever apply for any non mortage debt again.

Luke

CLAPTON wrote:

dont know if this helps or hinders
but

a. if you keep the firstplus loan going then
you have 130 more payments to make of £500 each making a total still to pay of £65,000
(i'm taking initial loan period as 15 year (180 months) and you have already paid 50 leaving 130 still to pay)

b. if you remortgage and have to rise £35,000 to settle the firstplus debt, then to compare like with like, assume the mortgage over the same period of 130 months then you would pay
£45,000 if the mortgage was at 5% and monthly payments of £349 or
£47,000 if the mortgage was at 6% and monthly payments of £366 or
£50,000 if the mortgage was at 7% and monthly payment of £384

in practice if you remortgaged you would presumably repay over your current mortgage period and the sums would be slightly different....why not speak to your current mortgage lender to see what they will do?

i would try to remortgage now ....see what the best deals are although this may depend upon your credit rating......obviously there is no need to say never ever apply for any non mortage debt again.

I agree with this, assuming you have the necessary equity in your home try and remortgage with you current lender or a new one if your current one is uncompetitive. This should allow you to get shot of first plus. They will charge you a penaty but it will be worth it to see the back of it. Alternatively you could stick with it for a little while longer make your over payments and try to bring the balance to £25,000. At this level you could get a unsecured loan reducing the risk to your property.

Rachman_2

lynzpower wrote:

Actually, you might find under contract law, as many others are finding, that these redemption fees are not entirely legally enforceable.

Not exactly, there's a lot of difference between penalty clauses which are not enforceable (which is where most the aim has been taken at bank charges) and early redemption charges. From my point of view, I read EVERY PIECE OF PAPER I sign, whether it's a car hire, a phone agreement, a loan document, a mortgage, a car purchase receipt. Because I don't like surprises... it takes a person 5 minutes to read, so why not do it, especially when it's as important as mortgaging your home - to simply abrogate responsibility and say it's down to someone else to explain it to you, provided you are not subnormal, why should you be able to enter into credit agreements if you don't read what you are signing and agree with what you are signing up for - read it and if in doubt, ask them.... - part of the whole problem is 'blame culture' and the "it's not my fault" - it is your 'fault' - you signed it and whilst there was a metaphorical gun to your head, you should still have read it and understood it.

I have very little sympathy with people that don't bother to do this - they know enough to get credit and know enough to try to wriggle out of it (in many cases), but they suddenly decide they did not know enough to understand what the documents meant - give over....

GettingThere_2

Re-mortgaging sounds like a great idea to pay off the secured loan, especially if you have a good relationship with your mortgage provider. It worked perfectly in my situation - instead of paying £750 between the two loans, our mortgage provider was very sympathetic and consolidated the secured loan into the mortgage - we borrowed no extra money and kept the mortgage term the same. The provider was only too pleased to take the business! :j

Although we ended up paying the FirstPlus charges (like I said, they made £14k out of me in elss than 2 years), our monthly payments for the same amount are now £300 less than they were. If you have that much equity in the house (£80k?) then talk to your provider and see if they can do you a deal. Most times they look at your account history with them, rather than a full and detailed credit check. Stress to them that you're not looking to borrow any more, just to be able to afford to pay what you already owe. You've nothing to lose by talking to them!

Good luck to you. :beer:

GettingThere_2

Oh, and Rachman.. you're not helping here pal! Hindsight is a wonderful thing, as is good advice - but people here are trying to improve their situation and their daily life. It sounds like you've never been in bad debt - in which case I admire you greatly, well done - but it's then difficult to appreciate the way those who are in bad debt feel every day of their lives.

People get into debt for all sorts of reasons, and most people on here don't try to "wriggle out of it". They're trying to move on.

Please have some respect for those who are trying to sort out mistakes or difficulties. Fair?

lswwong

We are here to support one another. Nobody is perfect! Let's focus on going forward and not criticising the past.

Someone mentioned earlier in this thread that Martin ought to runs his own day time ads to "counter" ads from loan consolidation companies.

GREAT IDEA!

Seriously, this could be better than asking a specific celebrity to stop fronting ads for a certain company. How viable is this idea?

GettingThere_2

Great idea pal - what do you think Martin?? Sure you're better looking than Carol Vorderman anyway....

h4nym

Hi there!

If you don't want to sell (and I see the argument of burning bridges etc) then why not remortgage? If you've owned the house for the past four years and you had sufficient equity for First Plus to get their sticky mitts on the deeds, then you'll have plenty of equity now to remortgage - not to mention your main mortgage company having several years of your payment record to draw upon when deciding...

Pay First Plus back a 100% overpayment - take the £60 on the chin.

Equally, if you're heading out to NZ, you'll likely more than cover your mortgage by renting it out - win / win / win!

All the best

H