HELP! Will full and final settlement affect credit rating? No previous defaults etc?

Angelic_1

Hi All,

I'm a newbie so please bare with me!:)
I stupidly signed for a HP agreement for my now ex partner....BIG lesson learned! The original amount was £25,000 over 3 years with a ballon payment of £10,000. Blind and in love my ex said this would be cleared in a year! however we are 3 years on and the settlement figure is now due. To be fair he has kept up the payments but now the big one is due he's gone awol.
i cannot afford anywhere near that amount due to personal circumstances and a newborn to look after alone. i fully understand because i was a fool and signed for it i am soley responsible. however i would like to try to avoid any major affects to my credit rating because hopefully i don't make any more mistakes and have aspirations to own a home and meet the man of my dreams :rotfl: etc.
I have had advice to make a full and final settlement if i can scrimp together some cash and that once this has been completed my credit rating will be in tact. My query is, i have no defaults or ccjs on my account at all, whilst negotiations are going on will a default be put against my name and can this be removed???

All help appreciated!

[Deleted User]

If you pay less than is owed, then it will have a major impact on your credit file - essentially you will have defaulted on the loan. They are also unlikely to entertain a short settlement whilst you are still making payments. But once you stop, again, your credit file is negatively impacted. Speak to the lender to see if there are any other options, but I don't think there are.

I'm afraid I don't have anything more positive to add, but someone with more knowledge of HPs may be along in a while. Good luck.

BoGoF

Is the balloon payment optional to keep the car?

Where is the car? It still belongs to the HP company.

Angelic_1

oh sorry i missed out a vital detail.....the car was written off!

Angelic_1

thank you for your replies so far, much appreciated

BoGoF

Oooops.........

I hope you (or the finance company) got any insurance payout.

Angelic_1

Unfortunately not! he failed to provide information which invalidated his insurance....couldn't get any worse could it!

Apples2

Angelic_1 wrote: »

couldn't get any worse could it!

He could come back....

Tixy

As has been said they are very unlikely to agree to a reduced full & final settlement.
On the off chance they would then standard practice from them would probably be to default the loan first - and then will mark your file as partially satisfied. Which will have a sbig impact on your file

But if you did manage to negotiate with them, it is exactly that a negotiation, and they key would be to see what you could get them to agree to (in writing and before you paid). In an ideal situation you'd want them to agree to a reduced F&F, agree not to mark a default and simply to show your credit file as settled. But sadly I doubt you would get that.

As to other options - have you spoken to the finance company to see if you can pay the settlement figure over a period of time at a rate you can afford rather than in a lump sum, and asked what interest they would charge?
Once you know that you could consider if its likely you could get a loan from elsewhere at a cheaper rate to pay off the settlement.

TheInbetweener

I have a loan with nationwide and have asked for a final settlement figure, which they have given me but it seems quite high. Does anyone know if i could get a reduced figure somehow?

dealer_wins

TheInbetweener wrote: »

I have a loan with nationwide and have asked for a final settlement figure, which they have given me but it seems quite high. Does anyone know if i could get a reduced figure somehow?

If you pay off £1000 they may well reduce the amount by £1000.