Can i reduce balances if i settle?

Kray

Hey Peeps,

I have a total of 12,200 across 1 loan and 3 credit cards and I'm only 24!

Loan - 7000 Natwest
Card 1 - 3200 Natwest
Card 2 - 1000 HSBC
Card 3 - 1000 Capital One

I have been really stupid building this debt up and have become stuck in the interest loop of hell.
Now I'm very lucky that my dad is in a position to help me out with a loan so I can get stuff paid quicker and everything I pay goes towards the balance rather than interest.

My question is,

Am I able to ring the credit cards/loan and ask for a settlement figure? Please bare in mind I haven't missed any payments as of yet and no accounts have been moved to the internal collection teams of the relevant banks.
I have a feeling you can only get a reduced settlement figure after a few missed payments which obviously I don't want to incur on my credit report.

I just want to get this sorted before everything becomes a problem and if I can get some reduction it would help a lot!

Many Thanks

Kray

The_Boss

You can for the loan - the settlement figure will be lower than if you kept paying over the full term as you will not be paying all the interest due over the full term.

But I suspect you wanted a discount on the debts you have run up and you will not be able to get that (quite rightly). You will have to repay what you owe.

Bravehearted_2

Why would they want to accept less of they money the lent you?

You're correct, they won't take any less than they borrowed you when you've been paying as agreed.

If you lent money to someone, would you be happy to receive less of it back? Thought so.

mcs1977

With the credit card's you spent the money you pay the balance IMO, interest is charged monthly so your balance is what you owe. With the loan I'm not sure if you have internet banking with NatWest but I do and they too add interest monthly so the amount showing on the screen is the minimum they will accept to settle. If the £7000 is with interest added you should get a reduced figure but that will be detailed in the paperwork you got with the loan. As Braveheart stated why would they want to receive less than they lent? HTH

BugsyBrowne

Kray wrote: »

Hey Peeps,

I have a total of 12,200 across 1 loan and 3 credit cards and I'm only 24!

Loan - 7000 Natwest
Card 1 - 3200 Natwest
Card 2 - 1000 HSBC
Card 3 - 1000 Capital One

I have been really stupid building this debt up and have become stuck in the interest loop of hell.
Now I'm very lucky that my dad is in a position to help me out with a loan so I can get stuff paid quicker and everything I pay goes towards the balance rather than interest.

My question is,

Am I able to ring the credit cards/loan and ask for a settlement figure? Please bare in mind I haven't missed any payments as of yet and no accounts have been moved to the internal collection teams of the relevant banks.
I have a feeling you can only get a reduced settlement figure after a few missed payments which obviously I don't want to incur on my credit report.

I just want to get this sorted before everything becomes a problem and if I can get some reduction it would help a lot!

Many Thanks

Kray

Settlement figures are normally something people would enquire about when their credit files are completely trashed through defaulted accounts etc.
Phoning up a credit card or loan lender where you have not defaulted and saying I know you lent me say 7k if I pay today can I reduce this to 4k and you let me off 3k please and they'll say pi*s off.

So your answer is No you can't.

Kray

Thanks guys. I thought the same to be honest but was made to ask by the wife. I just know basically I'm going to start missing minimum payments and wanted to clear everything before I end up screwing my credit report up. I only ask as I know people who have settled a £8000 credit card by paying £5500.

StuC75

The loan allows for money to be saved when you ask for settlement figure, since it is right for some of that interest to be cancelled out (depending on when taken out can vary how it works). Such a settlement of the loan doesnt count against your credit file..

A 'discounted' full & final settlement would mess up the credit report as that would be recorded as 'partial settlement'...

The_Boss

Kray wrote: »

Thanks guys. I thought the same to be honest but was made to ask by the wife. I just know basically I'm going to start missing minimum payments and wanted to clear everything before I end up screwing my credit report up. I only ask as I know people who have settled a £8000 credit card by paying £5500.

These people no doubt have a default on their credit files for 6 years. Although for some without morals or any financial responsibility this is a price worth paying....

YorkshireBoy

Kray wrote: »

I just know basically I'm going to start missing minimum payments

Use the money from your Dad to support you through these hard times, unless there's some reason why you won't be back on your feet anytime soon?

Jox

What are the interest rates for the loan and credit cards?

Look for the snowball calculator to work out which order to pay the credit cards off and when you can be debt free.

Don't let your dad get a loan and give you the money, it may end in tears and ruin your relationship with him.

What have you been spending the money on? Can you sell anything, get a part time job to make money and pay off what you can?

You're only 24 but are learning a hard lesson that will benefit you for the rest of your life.

JakeGreen

Keep up with the minimum payments at least, set up direct debits for these if you haven't already.

I'm assuming the interest rate on the loan is lower than the cards?

When you have spare cash, make additional payments to clear the highest interest card first. Then finish with the loan.

Don't use the cards for cash withdrawals from ATMs.

Any defaults will be on your file for 6 years, so it's best to avoid them.

It's best to make some sacrifices to your lifestyle now and get on top of your loans and credit card debts than paying a much larger price a few years in the future.

Good luck!