Debt advice

Spoonhead88

Hello, I'm currently in a bit of a pickle, I have a £2400 left on a personal loan that had all the interest front loaded. I'm currently 6 months in arrears about £600.
They have been threading to defaults me for months but haven't yet. I'm not worried about my credit rating as I've already had other debt issues this year and have cleared them.
I was wondering should I just keep waiting till they do default and sell the debt on then offer a full and final settlement for the reduce amount or should I pay of the arrears and go back to paying monthly?

I know some will see this as me trying to weasel out of paying the full amount and I understand if you want to tell me this/have a go.

Thanks

sourcrates

Hi spoon,

Do what's best for you, your idea is not too unreasonable, especially if your going through a rough patch.

Ignore trolls !!

Spoonhead88

Thank you. I'm not sure which way is best it comes down if it takes my current bank to sell on the debt.

EssexHebridean

Is your SOA still the same as you posted previously? If so then you had a surplus I think - how come you are now in arrears with that loan?

If you are still in the same position regarding living arrangements, and ESA, then can you not simply restart paying the loan as per your contractual agreements, and use perhaps £150 per month of your surplus to re-pay the arrears over the next few months?

Spoonhead88

EssexHebridean wrote: »

Is your SOA still the same as you posted previously? If so then you had a surplus I think - how come you are now in arrears with that loan?

If you are still in the same position regarding living arrangements, and ESA, then can you not simply restart paying the loan as per your contractual agreements, and use perhaps £150 per month of your surplus to re-pay the arrears over the next few months?

I believe my soa is the same I may do a new one just to make sure. This is the last of my debt the rest has been paid of this year. The reason for the arrears is I stop paying on this debt to clear the others. I have around £1000 in cash at the moment. Which I could use as a f n f offer.

EssexHebridean

Spoonhead88 wrote: »

I believe my soa is the same I may do a new one just to make sure. This is the last of my debt the rest has been paid of this year. The reason for the arrears is I stop paying on this debt to clear the others. I have around £1000 in cash at the moment. Which I could use as a f n f offer.

Assuming your SOA hasn't changed then, you have somewhere in excess of £300 surplus per month allowing for your loan payments continuing as per contract now? The £100 savings I wouldn't touch, personally - that's a good amount for an emergency fund. What you could look into though, if the interest on the loan was front loaded, is whether there are any penalties for an early pay-off. If not, if you save your surplus - or at least the majority of it, for a few months, you can then request a redemption figure which will include some of the interest being credited back, and pay off early, in a lump sum.

Spoonhead88

EssexHebridean wrote: »

Assuming your SOA hasn't changed then, you have somewhere in excess of £300 surplus per month allowing for your loan payments continuing as per contract now? The £100 savings I wouldn't touch, personally - that's a good amount for an emergency fund. What you could look into though, if the interest on the loan was front loaded, is whether there are any penalties for an early pay-off. If not, if you save your surplus - or at least the majority of it, for a few months, you can then request a redemption figure which will include some of the interest being credited back, and pay off early, in a lump sum.

Loan amount £3000 48 month loan arrears £522.82 24.8% Apr
£1856.18 of £4567.68 paid. What kind of redemption payment would I be looking at?

EssexHebridean

Spoonhead88 wrote: »

Loan amount £3000 48 month loan arrears £522.82 24.8% Apr
£1856.18 of £4567.68 paid. What kind of redemption payment would I be looking at?

Have a look at the back of your last statement. Sometimes they put redemption figures on there - you may get an idea from that. Failing that you can always ask them to send you a redemption statement for it as at a date of your choosing. You don't have to redeem, but again it will give you an idea.

Obviously goes without saying, the earlier you pay off, the better the saving will be. For front loaded loans though you may as well save the money to clear it into an interest paying account until you're ready to pay it across rather than overpaying each month. Better in your pocket, than in theirs.