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HSBC Managed Loan Advice
Hi all,
I have an HSBC Managed Loan (current balance just under £4,000), and have had it since April 2004. I have never defaulted on a payment. I'm paying in £70 per month, but due to the APR (14.3% afaik), they are taking around £50 in interest each month. Realising that I'm going to be paying this off for at least another seven years, I spoke to HSBC. Back at the beginning of the year, they suggested that I apply for a "normal" personal loan, which would increase my monthly repayments but give me a fixed five year term. I have applied, and been declined.
Today I phoned the Nation Debtline who were great. The person I spoke to suggested that if the interest is getting me down so much, I open a basic bank account elsewhere and empty my HSBC account into it, also making sure my Child Benefit payments go into the new account too. Then, I default on my managed loan, which should mean that HSBC pass it to a debt recovery agency. He said that in 99% of cases the interest is frozen, meaning I could continue to repay £70 each month, but with the full amount going towards the balance and not the interest.
Whilst this sounds good in theory, I thought I would check in here to seek your opinion. Should I really be "bad" and default? Is going to debt recovery agency a good idea in this case? Or should I just bite the bullet and keep up with the seemingly endless repayments...?
With thanks,
A.
I have an HSBC Managed Loan (current balance just under £4,000), and have had it since April 2004. I have never defaulted on a payment. I'm paying in £70 per month, but due to the APR (14.3% afaik), they are taking around £50 in interest each month. Realising that I'm going to be paying this off for at least another seven years, I spoke to HSBC. Back at the beginning of the year, they suggested that I apply for a "normal" personal loan, which would increase my monthly repayments but give me a fixed five year term. I have applied, and been declined.
Today I phoned the Nation Debtline who were great. The person I spoke to suggested that if the interest is getting me down so much, I open a basic bank account elsewhere and empty my HSBC account into it, also making sure my Child Benefit payments go into the new account too. Then, I default on my managed loan, which should mean that HSBC pass it to a debt recovery agency. He said that in 99% of cases the interest is frozen, meaning I could continue to repay £70 each month, but with the full amount going towards the balance and not the interest.
Whilst this sounds good in theory, I thought I would check in here to seek your opinion. Should I really be "bad" and default? Is going to debt recovery agency a good idea in this case? Or should I just bite the bullet and keep up with the seemingly endless repayments...?
With thanks,
A.
0
Comments
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Anyone have any ideas/opinions on this....?0
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impossible to give any advice without knowing details of your income and your spending and your general financial situation..other debts, house equity etc.0
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