flexible loan

Tigsmom

As a last ditch attempt to avoid a DMP we are considering a loan. We need to reduce our current outgoings but our credit rating is pretty good. I cannot get a 0% cc because my income is now too low so DH would have to apply for a loan or we both go for DMP thus losing the good credit rating.

We need a loan for around £10k to clear our cc's and for payments to be no more than £200pm. However, in a couple of years our income will increase so we would like the loan to be flexible to allow for overpayments.

I have done a search on the net but most of the flexible loans are from loan sharks who make them flexible so that you can pay LESS not more (therefore increasing their profit).

Any ideas anyone please?

[Deleted User]

Unless you're earning upwards of 60k, you're probably going to struggle.

You may find it useful to visit the DFW board and post a SOA.

CLAPTON

all normal mainstream loans allow overpayments.

you don't say your incomes or who owes what debt but broadly speaking lenders won't lend to people with a debt ratio of more than 50% (including their own loan)
so in your case they would be looking at an income of 60k
lenders also frown on people living in an overdraft as this shows you are not currently living within your means.

Tixy

All new loans have to allow overpayments on them (some charge a small fee on overpayments but a lot do not). If you really want to go this route rather than a DMP I would just focus on getting a loan with a decent APR - if you can - rather than the possibility of overpayments at some point in the future.

If you are almost at breaking point of a DMP - you/OH may struggle to get a loan though.

Tigsmom

CLAPTON wrote: »

all normal mainstream loans allow overpayments.

you don't say your incomes or who owes what debt but broadly speaking lenders won't lend to people with a debt ratio of more than 50% (including their own loan)
so in your case they would be looking at an income of 60k
lenders also frown on people living in an overdraft as this shows you are not currently living within your means.

7k of our debt is mine, the rest my DH. I would be clearing the £350 very debt first as I've been saving for that. The 10k loan would be to clear our other cc's so we would just have that and our existing loan (£8278 left). Income around £37k in total. Our current payments to creditors are around £466 pm which would be reduced to £180 (current loan) plus new loan payment amount.

I had no idea you can overpay on all loans now. Our current loan was taken out in 2006 and we did try to pay it off early after 4 years or so. We were told that it wouldn't be worthwhile as the first few years payments were interest only and we had only just started to pay the loan off. Since then I was made redundant and now only have a part-time job because of family commitments so that's why we looked into DMP. Both have good credit ratings, never missed a payment but are struggling to pay high cc interest rates. O/D currently stands at £300 this month so we could clear that at a push if we could reduce monthly debt payments.