Career Development Loan Advice

djalexr

Hi everyone,

Last year, I took out a Career Development Loan of £10,000 to fund a course at Bath University.

The interest on this was paid for me over the last year as part of the deal, though in the next month or so I will be due to start paying it back at a rate of about £250 per month, something like that...

I have got myself a job, earning 15K, is about £1000 per month after tax -

basically, I won't be able to afford that repayment amount. I don't want to find another job as I love this one, and it won't be easy at the moment though I am keeping my eyes open.

I know that the degree I have gained is valuable, and that in a few years I should be earning easily enough to deal with this loan...

Im not really sure how to proceed! For a long time I have been considering:

1) Ignore it - it is registered at my mums house where I never go. I realise I will get a bad credit rating etc but I really don't want any more loans or debt.

2) Attempt to renegotiate it, perhaps over a longer timeframe, try and delay repayments for another year

3) Take out a cheaper rate loan from (e.g. sainsburys offer one that might cover it over 7 years at £155 per month). 155 is still going to leave me struggling every month.


any thoughts on this would be very much appreciated

dmg24

My thought - why take out a loan that you cannot afford to pay back? Do you want debt collectors turning up at your mum's door?

Be an adult and speak to the bank. In the meantime, start looking for an additional part time job.

djalexr

I took it out because I wanted to get out of the crap job I had before...also, postgrad students basically can't get funding any other way. well, I have a better job now so that bit worked i just dont earn quite enough yet as I have literally just finished.

I am not too bothered about debt collectors turning up at my mums door...she does know I have the loan, encouraged me to do the course, and can't pay for it either so she will just tell them that I don't live there.

speak to the bank I will

CHR15

djalexr wrote: »

I am not too bothered about debt collectors turning up at my mums door...

I'm sure she is very proud of you.

It's very unliekly you will be accepted for a £10k loan with a £15 Salary.

Renegotiate or at least take some kind of proper advice and don't simply say "cheers easy for the money" and ignore it.

djalexr

i will try and renegotiate it - I don't really know how receptive they will be to me attempting to get it down, perhaps to something around 100-150 per month which i could maybe *just* about manage to pay.

Im not too bothered about it increasing the length of the loan or interest paid overall.

If the bank do refuse to negotiate to that kind of level though, I don't really see the point in doing anything other than ignoring them or telling them I can't pay it.

Falling short of the full amount will result in the same negative consequences as not paying any of it at all - in which case I can see myself trying to ignore it until I earn a better wage in a year or so

does anyone have much experience of negotiating terms with the bank like this?

Fiddlestick

djalexr wrote: »

Falling short of the full amount will result in the same negative consequences as not paying any of it at all - in which case I can see myself trying to ignore it until I earn a better wage in a year or so

What makes you think they won't obtain a county court judgement against you or register a default on your credit file?

CLAPTON

if you do decide to try to renegoiate with the bank, maybe consider presenting yourself and your situation in a more positive manner than on this board

djalexr

What makes you think they won't obtain a county court judgement against you or register a default on your credit file?

thats the sort of thing I meant by negative consequences - I assume that they will try and do that sort of thing even if I do pay something but its not what we agreed. that would suck but theres not a lot I can do If I don't have the money either way. If worst comes to worst, having my name clear of CCJ's or defaults might not be worth £10,000 to me....

if you do decide to try to renegoiate with the bank, maybe consider presenting yourself and your situation in a more positive manner than on this board

point taken! I will be sure not to mention that I don't have anything to do with that address anymore, or to reveal I don't feel any particularly strong normative notion of duty to pay it back while I am still struggling with the rest of my obligations. It will be more along the lines of, i am currently seeking better paid employment, within a year or so I should be able to revert back to the original payment terms...

Apples2

Just be honest.

Go in with a full statement of affairs and lay it on the table.

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

You HAVE to be realistic with your outgoings!

A rash decision now about the seriousness of ignoring it will have LONG LASTING consequences.

jon_boy75

djalexr wrote: »

thats the sort of thing I meant by negative consequences - I assume that they will try and do that sort of thing even if I do pay something but its not what we agreed. that would suck but theres not a lot I can do If I don't have the money either way. If worst comes to worst, having my name clear of CCJ's or defaults might not be worth £10,000 to me....



point taken! I will be sure not to mention that I don't have anything to do with that address anymore, or to reveal I don't feel any particularly strong normative notion of duty to pay it back while I am still struggling with the rest of my obligations. It will be more along the lines of, i am currently seeking better paid employment, within a year or so I should be able to revert back to the original payment terms...

can i ask why you cant afford it?
the bank will ask the same question

djalexr

Go in with a full statement of affairs and lay it on the table.

that is good advice, I will try and do that - I always have difficulty in trying to put some of these expenses down as a monthly amount however - e.g. 'holiday', 'travel' 'entertainment' 'clothing' (not that I spend a lot on any of that). the gas and electricity bills can vary significantly from month to month.

can i ask why you cant afford it?

Is a good question - I pay about 350 per month for rent. I also deal with all the bills in our shared student house which leads to ridiculous cash flow issues as people basically dont pay me back for ages (as they are mostly students or unemployed). I am on the verge of getting a pay as you go thing installed for electricity & gas, though I am not sure how much it will help (e.g. electricity blackout ---> alex, can you lend as 20quid to top it up???). As a general rule I try to stick to about £100 per week for everything else. I am due to start paying council tax again now as my course has ended, which is gonna be another chunk out of it. Bascially, I have had this salary before and tend to find that it keeps me just about level, sometimes saving between 50-100 quid in a month. I don't see though how I could keep up £250 on top of all that. I can try and explain that in a better way to the bank.