Help! - My Mum's SOA

CJG_3

I recently spoke with my Mum about how much she pays out etc per month. I've known for a while that she has had a large debt with Barclayloan that is crippling her finances. I asked her tonight quickly/roughly for as much info as I could get and said I would post on a place where i'm certain I will recieve positive help and hopefully some light at the the end of the tunnel. Here goes. My mother lives alone, and rents a flat. She is in a full time job.

Monthly Incomings:

Salary - £1,049

Monthly Outgoings:

Mortgage/Rent - £270
Council Tax - £83
Electric - £30
Water - 30
TV License - £10.95
Phone - £26
Insurance £6.26
Barclayloan £459.31
Othe Loan (not 100% sure of details yet) £50


Total: £965.52

Barclayloan - Was taken out years back, initial sum was £21500 + another premium loan £4868.05 = £26,368.05 & 72 repayments of £459.31 (interest 7.76%) I have the agreement in front of me and it seems my Mum has Barclayloan Protection also on the Premium loan which includes Insurance Premium Tax at the rate of 5%.

The current figure for this loan is £20,822.82.

It also mentions "Your right to re pay the loan early". Briefly it says you can bring this agreement to an end at anytime by making a single payment to cover both the cash loan and the premium loan. The amounts that you would have to pay for example:

One quarter of the term - (Cash Loan) £17141.81 + (Premium Loan) 3881.26 = £21,023.07
Half of the term - (Cash Loan) £12077.11 + (Premium Loan) £2734.51 = £14,811.62
Three quarters of term passed - (Cash Loan) £6388.87 + (Premium Loan) £1446.57 = £7,835.44

Help Moneysaving experts?! Is there anyway that crippling Barclayloan debt can be shifted around or loosened a little somehow?. My mum works hard but this thing is eating away at nearly half her salary, and is quite stressfull for her, with it being such a never ending timescale on it. Any advice would be greatly appreciated

tryhard_2

hi
how's her credit rating to shift debt to lower interest rate? is she getting c tax single person benefit?

CJG_3

tryhard wrote:

hi
how's her credit rating to shift debt to lower interest rate? is she getting c tax single person benefit?

Hi, thanks. I'm not too sure on those 2 questions I will find out.
Another thing she's worried about is maybe shifting it, but therefore increasing the length of the repayments, as she'll be 60 in a couple of years.

justruth

well for one get rid of the loans PPI, on both, that way there will be les to pay, but she should then consider putting that money into a savings account where she can access the money should she need to, it depends how stable her job is, but if it isn't that stable she may not be covered anyway.

Generally speaking the PPI is a waste of money and won't pay out when you need it to.

What about other costs such as food?

CJG_3

Thanks justruth
She seems pretty certain she cannot get rid of her PPI?

Food costs I left out, as she's left with roughly £83 a month I'd be pretty certain the majority would go on that and travel, estimate £50/60, leaving her around £20/30 pounds.

justruth

She can, she needs to contact the bank and remove it. Thy sometimes get a bit arsey about it but it would save her some. At the end of the day, if she gets sick pay from work she's fine, if she doesn't she'd probably not be protected anyway and if it all goes to pot and she loses her job, she can renegotiate the repayments with CCCS or CAB.

lizzyb1812

Re PPI - it is true that people have successfully persuaded their lenders to remove PPI from their loans. It is NOT the case that this does not always have consequences.

From what you say your mum is a wage-earner, so her PPI should pay out if she is made redundant, etc - ie she is probably not in the position where the PPI would not pay out no matter what happened. Some people who have got out of PPI have done so because they have been able to demonstrate that the PPI woudn't ever pay out for them anyway - eg people who are wholly dependent on benefits but have taken out a loan with PPI when their PPI prevents people in receipt of benefits making a claim.

Your mum's loan interest rate was probably dependent on her taking out the PPI - if she tries to get the PPI removed the bank may tell her she must pay a higher interest rate.

It is of course worth trying.

Sorry not to be able to offer anything more helpful - but didn't want you to assume cancelling the PPI would be either automatic and/or helpful :sad:

lizzyb

CJG_3

Thanks for the suggestion lizzy.
Cheeky bump here see if anybody has anything else they feel may help!