default on my loan?

dean23

Hi all, I've got a question i'd like someone to help me decide what to do.

Im paying debt every month, it always leaves me on the brink every month. I've made arrangements with all my payday lenders for a payment plan and I can handle these.

Ive got a bank loan which I owe just under 5k on. Its due to be paid up next october time. Im paying £330 a month towards this.

Along with all my other debts it always leaves me broke come 3 or 4 days after payday. In the past this is how my payday loans spiraled out of control. Borrowing every month. I'm determined no to borrow anymore. In the next few months some of the payday loans will be settled and I'll be a few hundred better off each month. But right now its my loan which I'm struggling with.

My question is this. Since I've already accepted my credit will be shot and I'll have defaults on my file from the payday loans, would it make a difference if I told the bank I can't afford the 330 a month and default on this? If I could pay say 100 a month I'd be able to last the month without looking to borrow more. Would there be a difference on my file if I default a proper loan with a proper bank? Can they refuse?

I asked a few months back if I could take a payment break while I sorted my other finances out but they said they couldn't do that.

Any advice would be most welcome

Thanks

Dean

National_Debtline

Hello Dean,

If you already have a poor credit file a further default is unlikely to make a great deal of difference. That said, prior to defaulting you may with to proactively contact the loan company to see if there could look at rescheduling the arrangement. If this is not possible the right approach is to complete a comprehensive financial statement as this will not only allow you to work out how much you need to live on each month - but also how much money you'll have left which can be offered to your creditors. If you have several debts the right approach would be to make 'pro-rata' offers to all. This means that the debt with the highest balance gets the highest portion of that money, and the smaller creditors subsequently get a smaller percentage each.

There's a detailed financial statement here on our website. Alternatively you could run through our My Money Steps system as it can provide you with tailored help and support.

I really hope that you find this useful.

Best wishes,

David @ National Debtline.