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'Help! I'm paying £76,000 interest on a £20,000 loan' blog discussion
in Debt-free wannabe
15 replies 3.9K views
Former_MSE_Penelope Former MSE
This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.
Read Martin's "Help! I'm paying £76,000 interest on a £20,000 loan" Blog.
Please click reply to discuss below.
This discussion has been closed.
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Then divert the extra money each month onto this secured loan.
Effectively this is adding the money onto their mortgage, as you suggested, but it is doing it without having to go to the bank and ask for more money.
Alternatively, would they be able to get a loan through Zopa?
Obviously the first question to any of this is are they allowed to overpay the loan?
This is the first time I have ever seen you suggest an IVA, and must stress caution. An IVA will only 'deal' with unsecured debts. The circumstances suggest that the debt is secured (albeit possibly not fully). This means that any element of the loan which THE FINANCE COMPANY considers secured will carry on. They therefore have the choice to value the security low (ie most of the loan will carry on for the rest of the 20 years) or high (in which case they may be able to take part in the IVA, but reject it if they wanted to).
There may also be an insolvency clause in the agreement which makes everything payable if they propose IVAs.
Bottom line is READ THE AGREEMENT before they take any action as it it could be very expensive not to do so. Of course, even if there is a penalty for early repayment it may be worth biting the bullet as it may be cheaper in the long run.
ps: why don't people read agreements before signing them, and why don't companies make them easier to read? How about suggesting using financial agreements in schools as part of English Comprehension lessons?
I am a Licensed Insolvency Practitioner, but you have probably not provided all the information you would give me if we talked in private. Please therefore do not rely on this posting as being my BEST advice. It is only my initial thoughts based on what you have put in your post.
What a good idea!
If all else fails you could live on rice and beans for a time or use the suggestions on this site http://www.cheap-family-recipes.org.uk/ to cut your grocery bill to the bone so you can pay off more.
The answer is to pay as much as possible as quickly as possible (overpayment rules permitting).
When the former Home Secretary warned about an increase in crime because of the recession, the focus was on burglary but I wonder if it will be far more white collar crime as it becomes harder for companies to survive on honest trading that we need to be extra wary of.