Full and Final Settlement if not in trouble

skyap

I've been reading about offering a lump sum as a full and final settlement. Does anyone know for certain if this can be done without being in arrears first? I've read an example of coming into some money or using savings, both of which wouldn't necessarily mean being behind on payments first. I'm moving to a new job and moving to save on rent so will have more money and I'm wondering if I saved it up I could pay off my debt in 6 months instead of a year.

Willing2Learn

I don't think creditors will accept an F&F payment offer if the account has not first been defaulted. Why would they? It loses them money when you are perfectly capable of maintaining your contractual agreement.

Why don't you just overpay your accounts so that you clear them all early?

skyap

Clearing early is my plan, but I wondered if rather than paying large monthly payments, I could save the money then make a lump sum offer, if I could get out of debt quicker. I had a feeling they wouldn't accept a lump sum but wanted to check to be sure.

TripleH

If you overpay, you 'might' be able to pay less as you msy have accrued less interest on what gas been borrowed.

Saving up a lump sum would only work if you earnt more interest on the money being saved than you were paying on debt.

To get a f&f settlement discount as mentioned in other threads comes at a cost. Your credit file will most likely be trashed for years in the future, if yours is fine now, you are shooting yourself in the foot in the hope of a small discount.

Unless your loans are very long term and have been sold on by the original lender, there is no incentive for a company to take the hit on discounting your loan.

Discounts tend to be offered if companies have an incentive to offer them, usually after making a lot in late / missed payment fees and interest off if the borrower.

EssexHebridean

If the debt is in the form of a loan there may well be an early settlement figure available which will save you some interest that would otherwise have been payable - take a look at the statements as they should make it clear if that's an option.