Help Please

stokegal

My mum applied for a loan today but was rejected to something on her credit file, after checking with experian it showed that she had late payments on her credit card (capital one - boo!)

The situation was that my step dad pasted away just before Christmas and my mum went onto statutory sick pay, she contacted capital one and explained the situation and they agreed that they would freeze the interest and she could repay £50/month. Now on her credit file it shows that she has 2 late payments and her account is under "arrangement"

She has 4 outstanding debts and has perfect repayment on all of the other debts. She also owns her house (still has a small mortgage)

Can anyone advise where is the best place for her to get a loan (she wants £20 000 to pay off all of her other debts and has kindly agreed to lend me some money for a deposit for a house, the loan can be secured against her house) and if she is entitled to get these late payments removed from her file?

Thank You for any responses

CLAPTON

without seeing her SOA with details of income, spending and all the debt details, i would think it most unwise to offer any views on her taking on more debt for herself let alone anyone else.

Suppose she was on statutory sick pay again.
you should encourage her to see the best way of paying off the loans rather than simply shifting it from unsecured debt to secured debt. Once its secured debt, her house will be at risk if she has difficulty in repaying the debt.

get her to post up an SOA and then we can see the full details.

tigtag02

stokegal wrote: »

My mum applied for a loan today but was rejected to something on her credit file, after checking with experian it showed that she had late payments on her credit card (capital one - boo!)

The situation was that my step dad pasted away just before Christmas and my mum went onto statutory sick pay, she contacted capital one and explained the situation and they agreed that they would freeze the interest and she could repay £50/month. Now on her credit file it shows that she has 2 late payments and her account is under "arrangement"

She has 4 outstanding debts and has perfect repayment on all of the other debts. She also owns her house (still has a small mortgage)

Can anyone advise where is the best place for her to get a loan (she wants £20 000 to pay off all of her other debts and has kindly agreed to lend me some money for a deposit for a house, the loan can be secured against her house) and if she is entitled to get these late payments removed from her file?

Thank You for any responses

Please dont let your mum secure a loan on her home for you!

chevalier

Sorry but this is a very bad idea. If she becomes ill again, then the secured loan company could force the sale of the house.

In the nicest possible way and taking into account all that went on just before christmas, sure the better thing to do would be for you BOTH to budget, yourself you get your deposit, and your mum to pay off her debts?

Was there any money from your dads estate that you mum is entitled to?

sorry if this is a bit harsh, but moving debt from one sort to the other isn't paying off the debt.

Perhaps your mum could speak to Payplan or CCCS about a debt management plan. Both these companies offer FREE impartial advice about managing debts, and if they set up a debt management plan for your mum then they don't take fees out of your mums money, so more goes to creditors.

best of luck
chev

stokegal

Thanks for everyone's advice, but my mum isn't actually in a position of debt to the point where she can't make her repayments on her debts.

The only reason why she was on SSP before was due to the shock of my step dad passing away (it was very sudden)

She isn't borrowing all of the £20 000 to lend to myself, she would just prefer to have 1 monthly outgoing each month than 4 seperate debts. The question of her struggling to pay her debts seems unlikely as she has very few outgoings.

I suppose my main query was is that is she entitled to get these late payments taken off her credit file, as she has not made any late payments she has paid the agreed amount on time.

Her SOA stands as

Balance Payment Per Month

Mortgage £15,106.00 £158.00
Credit Card (1) £1,482.00 £50.00
Credit Card (Capital 1) £5,964.00 £50.00
Loan 1 £2,884.00 £144.00
Loan 2 £3,801.00 £119.00

Total (with Mortgage) £29,237.00 £521.00


She is looking to borrow £20 000 to pay off all exsisting debt (aside from mortgage) and borrow myself £3 000 and to make home improvements of £3 000

The reason that she is willing to lend me the money for a deposit is that a neighbour is selling their house and will accept a very reasonable offer from myself, as houses don't come onto the market very often in my mum's area and I want to stay as close to her as possible (this house is 4 doors away) it seems like the right decision to buy this house

As she is paying out £363/month on debt repayments we are just looking for something that will be less than this and she doesn't mind having it over 10 years.

chevalier

I would suggest that you have a look at a site called https://www.whatsthecost.co.uk. It is all very well having changed the debt from 4 debts to 1 but your mum WILL be paying out MUCH more in interest over the lifetime of the secured loan, than she is at the moment.

Also I am a bit confused as to how 3k will be enough for a deposit? Surely the neighbours will want more than 30k for the house (assuming 10% deposit?).

Must be the late hour. I will try to do better tomorrow, so take care until then.
chev

stokegal

Hi Chevalier

Thanks for the response, the £3k is towards a deposit, I am buying with my OH who has managed to save up his half of the deposit due to him having no debts (and an ability to save)

She understands that she will end up paying more interest off in the lifetime of the loan but she would prefer to be living comfortably for the next 10 years with 1 repayment and then be completely debt free rather than juggling 4 debts and BTW the 2nd credit card is with Capital One (platinium) and her interest rates will revert back up to in 16.9% August

supersavershal

Hi there I understand exactly what you mean, my OH and I took out a loan to clear all of our debt and just have one monthly payment.We know we will pay more interest and are basicly moving the debt, but we wanted to live comfortably and not worry as we have 2 young children and wanted to enjoy them not let debt paying take over our life.We could easily afford the new monthly payment and we havnt taken out any more debt or maxed the cc out again as we have learnt our lesson.We now have more money in our pockets each month and can pay for the things we want outright and not on credit.Ours is also a ten year loan but at least we know what is going out each month and can budget accordingly and our credit rating is much healthier as each month the loan is paid on time by direct debit.Everyones situation is different and we all have a different way of life.My life is about making decisions and they are to live comfortably with disposable income each month (I work damn hard and want to enjoy my earnings) to not get into anymore debt, and to help my family.So I totally agree with what your mum is proposing to do and due to the nature of your recent bereavement i bet your mum is realising life is too short to waste it sitting at home penny pinching.

rayday2

My MIL took a mortgage out on her house which is waht you are talking about secured loans are virtually mortgages! following the death of her husband, its ok now she can breathe easy.

Fast forward 6 months needs a new garage roof uses the credit card, fast forward a year takes out a loan to consolidate the cards because she kept them going.

Fast forward another year again cards are up to the hilt, loan and mortgage. Can't afford to keep the house she had with her husband of 26 years. So she sells the house. Moves to one in a cheaper area and smaller.

Fast forward a year she maxes her cards again, fast forward another year loan for cards and maxed up cards again. So now she is taking equity out of the house - real name for that a mortgage on the house she never indends to pay till death.

I guess in a years time the cards will be maxed again too and there is nothing she will do to change we have tried everything.

OK you say she is not the same as my MIL - my MIL was not like this till the death of her husband, I think she got depression and the spends and the more spends she gets the more debts she has and the more down she gets life was not like this when her hubby was around.

None of us have a crystal ball can your mum say that nothing bad will happen to the house in ten years that she won't need to sort out, roofs, windows, boilers etc - and clearly you will not be able to help her because you are like we all are struggling with your own.

Secured debt with only one wage earner is never a good idea.