Irresponsible lenders?

TPpurple

I have recently gone on maternity leave from work. I have been saving but am concerned due to some extra expenditure about whether I can cover the mortgage and my Tesco bank loan until October when i planned to go back to work.

I just called Tesco bank to ask if I could take a payment holiday (I have ten months of the loan left - ironically it ends the same month I plan to return to work) or if I could extend the term of the loan to reduce the payments. The loans department said they couldn't help and referred me to the collections department who can help if I set up a payment plan which will show up on my credit rating.

I explained that I'm not in financially difficultly but I want to pre-empt that potentially happening, so I just wanted to be able to delay some payments or extend the term. I was advised that my only option with Tesco is either a top up loan i.e. I take out an extra £1000 to add to the £3100 left on my existing loan and extend the term or I set up a payment plan which will affect my credit rating.

Alternatively I take out a loan with someone else and pay off Tesco. Unfortunately the small amount means the interest rate on another loan would be double what I'm currently paying.

Those are my choices and I am shocked, I can't believe in this day and age that I did the responsible thing to find a solution before I got into difficulty and their response is to either offer a bigger loan or a black mark against my credit, that to me is a total lack of support.

Ultimately I will probably have to carry on paying and if we're struggling go back to work sooner, not ideal from my point of view, because I want to spend as much time with my daughter as possible, but it looks like my only choice.

Has anyone else experienced this problem with lenders and if so what did you do?

Tixy

Its a fairly typical response from lenders for loans, they generally will only let you reduce payments if you enter a payment plan - and that is then marked on your credit file.

Whilst they've mentioned a top up loan - it may well be that they wouldn't actually let you have one if you did apply for one with them.

I guess most people either struggle on and pay, or accept the hit on their credit file.

ILW

Cannot see the irrepsonsible bit. If you do not pay per the agreed term it is a default.

chalkie99

I'm not sure if there is that much difference, in reality, between the "payment holiday" you requested and the "top-up loan" suggested.

A "payment holiday" is an unfortunate term really as you still rack up extra interest while you are missing payments so you are, in effect, increasing your loan.

Additionally, 10 months is a heck of a break, much longer than most of these so-called "holidays".

Work out how much interest you are paying and do the sums.

poppasmurf_bewdley

TPpurple wrote: »

Those are my choices and I am shocked, I can't believe in this day and age that I did the responsible thing to find a solution before I got into difficulty and their response is to either offer a bigger loan or a black mark against my credit, that to me is a total lack of support.

Some people might say that the responsible thing to do was not get pregnant until you could afford it.

Personally, I think responsibility works both ways. You are committed to the loan from Tesco but you opted to get into a situation where you would have problems paying it back.

Hazzinho

Sorry but nothing is unfair about it. The logical solution would have been to plan better and have a child a few months later then the loan would have ended before you struggle. Not trying to patronise but giving my perspective.

ejc81

chalkie99 wrote: »

I'm not sure if there is that much difference, in reality, between the "payment holiday" you requested and the "top-up loan" suggested.

There is probably a lot more interest involved in borrowing another £1000

chalkie99 wrote: »

A "payment holiday" is an unfortunate term really as you still rack up extra interest while you are missing payments so you are, in effect, increasing your loan.

Additionally, 10 months is a heck of a break, much longer than most of these so-called "holidays".

:rotfl:

I think if you read the OP she was asking for a 1 month payment holiday as she only has 10 months left on the loan. However, if anyone knows any lenders that offer 10 month payment holidays then please let me know

Tixy

ejc81 wrote: »

:rotfl:

I think if you read the OP she was asking for a 1 month payment holiday as she only has 10 months left on the loan. However, if anyone knows any lenders that offer 10 month payment holidays then please let me know

Not how I read the OP at. As she states

Ultimately I will probably have to carry on paying and if we're struggling go back to work sooner, not ideal from my point of view,

rather than "I will probably have to find some way to cover this 1 payment".

ejc81

TPpurple wrote: »

Has anyone else experienced this problem with lenders and if so what did you do?

Basically they do not want to hear that you're worried about repaying, as you've already found out anything they do to 'help' generally destroys your credit rating

Speaking from experience, if you want to keep your credit rating intact, then you need to look at alternative funding. Have you not got a credit card on hand for emergency use? Can you not apply for a 0% deal on a card to use for the next few months. If you put your regular spending ie shopping etc on that, then you could use the cash you would have spent for the loan repayments?

Also from experience, babies are only babies for a very short time so anything you can do that means you don't have to rush back to work, will definitely be worth it in the long run

ejc81

Tixy wrote: »

Not how I read the OP".

Just goes to show how we all read different things into the way people write. I could be wrong and she may well want a 10 month payment holiday......but seriously:rotfl:

Twiglet0309

I had to give up work 5years ago to take care of my Mother. It all happened quickly and at the time I had an overdraft, loan and credit card. I informed my creditors of the situation and made repayment offers which were refused. I then went through a DRO, which thankfully put an end to my debt worries.

Since the DRO I have not been able to get even a simply bank account as my credit rating is so bad. On the other hand, a friend's daughter, who is a single mother with 2 children and living on benefits has got 2 bank accounts with Barclays and they have just loaned her £5k. She has a CCJ and is in arrears with her rent. She has a Provident loan (where they come round and collect from you) and numerous debt collection agencies after her for non payment of bills etc.

What in heavens name are Barclays thinking?