Girlfriend has loan but is now on maternity leave

immoral_angeluk

Tiddlywinks wrote: »

Your GF chose to have a baby.

Not neccesarily... not all babies are planned!

the_insider

immoral_angeluk wrote: »

Not neccesarily... not all babies are planned!

They made the choice not to take preventative measures!

opinions4u

the_insider wrote: »

They made the choice not to take preventative measures!

It seems marriage is an effective contraceptive .

Lifes_Grand_Plan

Hax wrote: »

[*]Why someone would look for someone else to blame for their financial situation which is caused by their own lifestyle choice

Welcome to planet earth in 2011.... one of the many reasons that this country and possibly the world is in the state it is today.

Everyone else is to blame.

27col

I really can't see the point of saving in an ISA when the same money could have been used to reduce the interest paid on the loan. Madness!
Also,it's mildly amusing that the conditions of the loan were presumably quite acceptable until the pregnancy occurred. Then, as if by magic, the question is asked, "was I mis-sold the loan".

opinions4u

27col wrote: »

I really can't see the point of saving in an ISA when the same money could have been used to reduce the interest paid on the loan. Madness!

I've sold many personal loans in my life. On every occasion I spoke to the applicant about the benefits of saving and the flexibility that it gives in future - usually to be ignored.

But the applicant clearly had no intention of wanting to pay more for the loan monthly payment. The applicant can no longer afford the loan monthly payment.

That £30 a month for savings can now be allocated to other expenses in life. A £30 higher loan payment would simply have exacerbated the current situation.

There is a case for both saving and borrowing. Anything that provides an opportunity for somebody who relies on borrowing to become a saver should be encouraged.

ali-t

wheelerc wrote: »

She does have most of the money from the ISA left which we can use to help repay the loan early. I can only get the 7.6% rate if borrowing over £7,000... but I'm rather tempted to do that as I'd like to upgrade the car too

£7000 over 24 months at 7.6% = £7547.72

So if Natwest will settle the loan for anything less than £3652.28 (£4200 - 547.72) we're better off (in terms of the interest we're already due to pay), and effectively get another £4000 at 0%. I think.

This is coming from a not very savvy person but my logic says that if you use the ISA money to pay the loan repayments, your girlfriend could be back at work by the time the ISA money runs out and the problem will be solved as she will be able to make the payments from her wages.

The other themes that are coming through are that:
1/ you feel the interest rate is too high and want to find a cheaper way to repay the debt
2/ you hope you could get the debt scrapped altogether under mis-selling regulations

I can't help you on those but good luck

wheelerc

Hi All,

Sorry I stopped getting email notifications of responses on this thread, and I've just logged back in and seen all the responses. It's now a few months down the line so I wanted to let you know the current situation, and explain a few things, as it seems a lot of people have read others responses and then chipped in their opinions based on that, rather than reading the original questions.

The first point is that i/we could afford the repayments, I just wanted some advice to see if there was a way we could save some cash be reorganising the debt. I'm not a big fan of giving away money, and I thought users of a 'Money Saving Expert' forum would feel the same.

Secondly, I didn't say that an interest rate of 18% was criminal. However advising someone that taking out a loan of £5,000 over a period of 5 years at a rate of 18%, plus selling PPI, and taking out an Advantage Gold account plus opening an ISA with a monthly payment into it should be. That advice was clearly provided to get as much comission for the sales person as possible, rather than to sell appropriate products to the customer.

What I've now done is to take out a loan with HSBC for £7k at 7.6% (yes, I could get that rate) and repay my GFs loan, and upgrade the car. She transfered me the money in her ISA and is now paying me back at a much lower rate over the same period as her existing loan. Total saving for her of over £650, I have a nicer car, we can live comfortably and both afford the combined repayment without feeling like we're being ripped off by a bank.

I've written to NatWest on her behalf and they agreed to refund 12 months of the 'Advantage Gold' account fee (refund of ~£155). They are also investigating the mis-selling of PPI on the loan, which (should they rule in our favour) will get us back over £1200.

Thanks to all on here who offered their advice.

- Chris

Apples2

Good news but I still don't think you have grasped the role banks play in this world.

They are a business hoping to make profit. As much profit as they can, people buy shares in banks hoping they too will make profit.

You are confusing banks with financial advisors who would indeed look at products most suited to you in order that you use your money wisely. An ifa would have found the best products for you. . . For a fee of course, the ifa also wants to make money from you but he should save you money overall.

The banks are not your friends, they will offer you products and let you decide if it is the best you can get.
They are in a competative market and have to fight for custom, but also protect their own business from daft risks (not always successfully).

KingElvis

Yep, well done op, as long as you got that all important upgraded car then all's well in the world and we can all relax, have a cuppa etc etc