IVA v UNSECURED LOAN

sapphi2ndrow

HI all :j

I've got another 16 months plus, probably another 12 months on top of my IVA.

I'm a joint home owner with my almost ex husband so of course there is a restriction placed on the property.

Ive been contacted via the IVA company to say I could get an unsecured loan which will in turn end my IVA, enable me to rebuild my credit rating and of course will mean if we sell the property I get to keep my share of the equity.

I can also pay off the loan amount early should I have a windfall.

Down side is that the APR is 29.4% which means it will take me 47 month to pay the loan off. (19 months longer than the IVA).

I like the idea of 're building my credit score up as the loan payments will contribute to that and of course knowing that if I have to sell I keep 50% of the equity as I have 2 small children. The restriction on the property won't be lifted tho as my ex still has his own IVA.

Any thoughts/advice?

Many thanks :beer:

sourcrates

Yes, don't do it !!!


For one thing, you would be braking the terms of your IVA, as you cannot borrow more than £500.

The word "could" is also the key here, its unlikely you would be accepted for an unsecured loan whilst your still in an IVA, you would be pushed to even get a payday loan never mind the amount you would need to clear your IVA.


You are essentially insolvent, no honest lender would lend to an insolvent.

Its a bad idea, and I doubt you would be accepted anyway, see your arrangement through till the end, you really don't want additional borrowing at this stage.

sapphi2ndrow

The company is.called.Perinterest and.specialise in loans to clear IVA's. I would be issued with my completion certificate. They are having a creditor meeting to see if the lenders are happy to get their money early (why wouldn't they) I, get to keep 50% equity if due to the divorce I have to sell to enable me to start again (I have 2 young children). You're right I may not be accepted but the fact that I have never missed a payment, always filled in the income expenditure form and returned it with evidence and the mortgage is always paid foes in music favour. I do feel cautious tho as it's too.good to be true... thank you so much!

sapphi2ndrow

They are called Perinta sorry

fatbelly

Debt Camel has discussed this in detail

http://debtcamel.co.uk/perinta-loans-end-iva-early/

Her conclusion:

I think there are two winners here:

◾your IVA firm IVA fees are mostly paid in the first half of the 5 year term. By ending the IVA at 30 months, the firm gets most of the fees but saves all the costs of the last few years.
◾creditors Your creditors will get all their money in a lump sum in the third year. If anything had gone wrong with your IVA they may have got little or nothing. This loan gives them money sooner and removes a lot of risk – a big gain. This risk is being transferred over partially to Perinta (who are getting paid for it) and partially to the debtors.

The losers are the people who take out these loans who will be in debt for longer and paying back a lot more. That’s a high price to pay for escaping from an IVA early, especially as there are cheaper ways of improving your credit score.

This early exit loan may be a good idea for some people. If you are expecting a large pay rise soon, for example, although it would have to be really big to outweigh the extra cost of the loan.

sapphi2ndrow

I've just been reading this! Thanks

I've been put off increasing my hours at work because of the iva but is it a possibility in the future.

I understand the longer term of a loan is a disadvantage but, being in a position of being able to have my half of the equity of my house is what makes it appealing rather than have to hand it over to my creditors.

Tough decision

Thank you! X

sourcrates

Is this something new then ?


My IVA finished in 2014, I was never offered the option of a loan to end it early, not that I would of taken it.

I can see the benefits for you in your situation, with regard to the house equity, but will end up paying a hell of a lot more in interest.

But you are right though, it is a tough decision !!!

sapphi2ndrow

I think it's a new thing yes!

As.long as the equity situation it appeals because if my income increases I can repay the loan off quicker... something you can't do with an iva.

Everyone's situation is different I suppose. My ex also has an iva so I'm joining make his seeing selling isn't a good idea at least until the iva if finished as he won't get any of the equity (yes I'm going through divorce too). If he agrees to not sell then it makes sense to stay in the iva..... I'm awaiting his financial.proposal from his solicitor.

Congrats on getting through your IVA! X