Loan in default - advice needed

RoxiJ2411

Hi all,

I was hoping to get some advice on a tesco loan that i defaulted back in Feb 2014.

The default started after I lost my job back in september 2013 and was unable to make my monthly payments on my account. I did find a new job in February 14 and immediately started making monthly payments on my loan.

Tesco at the time were quite understanding of my situation and despite being in default they allowed me to set up a payment plan with their collection department in order to get the debt paid off. We agreed that I would pay my usual payment of £220 a month plus £80 of the money I was in arrears. At the time I was reassured that once I paid off the missed payments (totalling £1100) I would come out of default and be passed back to the normal loans team within tesco.

After eventually paying off the arrears I then checked again that the default would show as cleared and I would be moved out of collections to which I was told this was correct. I heard no news on this for a couple of months so contacted tesco again and after being passed around various people within their team (none of whom could not answer my question), I was eventually put through to a manager who told me I had been misinformed and that my loan would stay in default until I had paid off the entire balance and offered me a £10 voucher for my inconvenience.

Does anyone know If the information regarding the entire balance staying in default is correct? I have tried to research this myself but I haven't had any luck.

Tesco have been extremely helpful and understanding, but I am now in a position where I desperately need a new car and with no savings, I would need to get a loan/finance to cover this, which I am struggling to get.

Any advice about how to improve my credit rating in the meantime would be appreciated!

Thanks

Candyapple

If your account was defaulted then that will remain on your credit history for 6 years from that date as it is a factual account of what happened.

If you need a new car you best get saving then because with a default that is still relatively new, you can rest assured that you will be declined for the best rates for loans/credit cards and you'll be offered loans from lenders with extortionate rates.

RoxiJ2411

Yes I'm aware the default will show on my credit history for 6 years. What I'm wondering is is it correct that despite making my regular monthly payments it still states I'm still defaulting every month on my loan.
I am currently unable to save any money a month as tesco are taking all remaining money from me after my monthly expenses like bills, petrol, food as part of a payment plan they set up.

mrsammyp

When you defaulted, the agreement would have been broken and the whole balance become due. Your credit file will reflect this and show as defaulted until the balance has been settled in full. It will then show as satisfied.

Clive_Woody

RoxiJ2411 wrote: »

Yes I'm aware the default will show on my credit history for 6 years. What I'm wondering is is it correct that despite making my regular monthly payments it still states I'm still defaulting every month on my loan.
I am currently unable to save any money a month as tesco are taking all remaining money from me after my monthly expenses like bills, petrol, food as part of a payment plan they set up.

Sorry I have to ask, if you have no money each month to save how would you pay back a new loan on top of the current loan?

Brock_and_Roll

You say that you have paid off the arrears, so are you now back to whatever the original loan payments are?

If that is the case but you still have no spare money after food and regular bills then you clearly cannot afford the repayments on another loan and will struggle to get one from anywhere. Perhaps there is a wider issue here in terms of your income and expenditure?

johnmondin81

I agree with this. I think the question is, how can you start making more money to pay back the loan?

MEM62

RoxiJ2411 wrote: »

I am currently unable to save any money a month as tesco are taking all remaining money from me after my monthly expenses like bills, petrol, food as part of a payment plan they set up.

If you cannot afford to save you cannot afford loan repayments. Where do you think the money will come from for the repayments if you have no spare cash each month?

poppasmurf_bewdley

RoxiJ2411 wrote: »

Tesco have been extremely helpful and understanding, but I am now in a position where I desperately need a new car and with no savings, I would need to get a loan/finance to cover this, which I am struggling to get.

Any advice about how to improve my credit rating in the meantime would be appreciated!

Thanks

If you have no savings, this points to the fact that you have no spare money to save. If this is so, how do you propose to pay off a new loan for a car?

You are struggling to get a loan because loan companies can see your situation and know you can't afford it.

DCFC79

Id post an soa on the debt free wannabe board which is just below the Loans board.

Maybe you can cut your spending.