Need advice on paying back old HP loan

Hamilton6137

Hi,

I’m new to this site and am looking for some advice regarding a Hire Purchase agreement I took out with HP car finance company in late 2014. Basically, I desperately needed a car at the time to get me to and from work and I took out a HP agreement with the company at an extortionate rate of interest (around 85%) which meant I would have paid over £9000 over 3 years on a principle loan amount of £5000 for the car. I was paying the loan no problem until a van rammed into the back of the car writing it off. I carried on paying it from the insurance payoff until I was over halfway into the 3 year period and I was only a couple of hundred quid short of covering the principal loan amount. My dad then borrowed the rest of the insurance money off me without paying back then I stopped payments at this point as I was unable to afford them. The last payment was made in August 2016 and the finance company have been chasing me up for the rest even though they don’t have an address for me. I’m in a slightly better position now and would like to clear the debt from my file but cannot afford the full amount. If I was to send the finance company a letter with an offer to clear the principle loan amount on top of a goodwill gesture of £600 would the close the account and would I see a change in my credit file and credit options?

Any help regarding this matter would be greatly appreciated. I realise that I should have informed the finance company after the car had been written off however that would have left me with a shortfall as the payoff did not cover the outstanding loan amount due to the high interest rate and subsequently would have left me back at square one with no car or money for a new one.

[Deleted User]

Hamilton6137 wrote: »

If I was to send the finance company a letter with an offer to clear the principle loan amount on top of a goodwill gesture of £600 would the close the account and would I see a change in my credit file and credit options?

Only if that fully settles the outstanding amount.

It's unlikely a 'goodwill gesture' forms part of the repayment schedule.

Willing2Learn

And just to add, that for a partial settlement to be acceptable, the account would have needed to have been passed to a Debt Collection Agency. Have you looked at your credit files to see who exactly is currently managing the account?

Hamilton6137

I’ve signed up for Experian but it doesn’t tell me who is handling the account but I did get an email from the original finance company only a couple of months ago with them asking to get in touch.

[Deleted User]

They'll be the ones handling the account. Speak to them.

foxy-stoat

Hamilton6137 wrote: »

If I was to send the finance company a letter with an offer to clear the principle loan amount on top of a goodwill gesture of £600 would the close the account and would I see a change in my credit file and credit options?

"goodwill"...paying £600 more than you originally borrowed and some £8,336.32 less than you were contracted to pay back ( you should of paid back £13,936.32 total @ 85% interest ).....naaaa I dont think you are close to what they would accept.

Not that I approve of 85% interest rate loans though. I would rather wait another 3 years and then the loan is unenforceable.

Good lucks

Willing2Learn

foxy-stoat wrote: »

I would rather wait another 3 years and then the loan is unenforceable.

I would also be tempted to do this. They have not got your address and their emails are meaningless. If they don't find out your address in the next three years then you could get away with it...

Hamilton6137

The 85% was just a guesstimate. The total amount I was to pay back was around 9.5k on a 5k loan so 4.5k was the interest. I paid 4700 when the payments stopped.

foxy-stoat

Hamilton6137 wrote: »

The 85% was just a guesstimate. The total amount I was to pay back was around 9.5k on a 5k loan so 4.5k was the interest. I paid 4700 when the payments stopped.

£600 wont be enough for them to forget about the loan. Wait for another 3 years, if you do not acknowledge the debt for 6 years its done.