Loan application whilst an a dmp

Flutterby83

Hi all,

I am posting on behalf of a very close friend and want to make sure I have my facts right...

Her partner entered into a dmp last year so it is very far from being cleared yet, however, he is discussing getting a provident loan for something that is non essential (I have explained he's acting like a spoilt brat and she understands this but can't get it through to him) Am I right in telling her that the application will jeapordise his dmp? Other than them obviously saying an outright no and the stupidly huge rate of interest, am I correct in saying the terms of a dmp mean he cannot apply for credit whilst in it and if he does, any application can potentially end his dmp?

I am hoping to pass on factual advice to both of them so that he can see the seriousness of the situation but as I no longer have anything like this, my knowledge is a bit rusty.

Thanks for reading x

fermi

Flutterby83 wrote: »

am I correct in saying the terms of a dmp mean he cannot apply for credit whilst in it and if he does, any application can potentially end his dmp?

For the vast majority of DMPs, yes.

For example with StepChange

http://www.stepchange.org/Portals/0/doc/DMP_Agreement.pdf

2. Not to borrow more money or enter into a new credit agreement without asking you first.

rockm87

As far as I know when you are on a DMP you arent allowed to apply for more credit.

...I can see why he is in a mess financially if this is his attitude. This is a little bit why I dont like DMP, it passes the buck to someone else and you dont learn your lesson (not always I know!!! they are perfect for the most desperate of cases)

He needs to get a grip and grow up!

Flutterby83

Thank you, I thought so but didn't want to pass on false information x

Meatloaf1981

A DMP is an informal agreement and in actual fact there is nothing stopping someone applying for more credit, just that obviously it defeats the whole object of the DMP in the first place as you're adding to your debt rather than working to reduce it. My advice to your close friend is to tell her partner that if he wants to apply for a loan then he can knock himself out, but she's not getting involved and won't be bailing him out when he inevitably defaults on it.

DMP's through charities do often have these "No more credit" clauses, yet they would do no more than decline to assist you further if you did decided to take out more credit. Self-run DMP's are only called DMP's as it gives them a name for the arrangement you're in, even though it is entirely informal. It is up to the individual who is running their affairs as a DMP to decide whether a further loan would be worth the hassle or not.

Good luck to your friend, sounds like she needs it!

sourcrates

He would probebly get the loan actually as provident specialise in bad credit loans to a large extent, and as there collection method is by a doorstep collector, who comes to your house, he really needs to think about the hassle if he gets it, and defaults on it.

B0B

If they offer him the loan he isn't doing anything illegal. Just something stupid.


As I under stand a DMP is an agreement to pay.


Clear the debts before any more credit, if you need it.


As the loan will be at a stupid APR.