Loan Arrears Advice

12bdebt3

I’m looking for some advice. I’m struggling to pay a loan back because of other commitments; mortgage, childcare, etc. I applied for a different loan but was given a rate of 19.9% when I’m currently paying 6.9% so there was a massive different in repayments to the point where I’d rather struggle than pay thousands extra over a longer time just to give me a little bit more now. I don’t have more going out than I’ve got going in but I’m not too far off and I’ve applied for a promotion at work which will help me massively financially if I get it but can’t rely on that, so I called the bank up to discuss a possible reduction of the payments to clear the debt over a longer period. They were helpful and advised me that I could fill out an income and expenditure form with them online to determine what I can afford to pay. When I’ve read the small print it’s advising me that I would go into arrears with the amount owed adding on top and possibly accruing interest. Please can I have general advice on what this entails and the impact? My loan at its current rate will take 5 years to fully repay (so maybe 6,7,8 if I reduce payments) and my 5 year 2.3% fixed mortgage rate ends in 4 years so I don’t want it to impact that.

[Deleted User]

It depends on what they decide to do. They may reduce or suspend interest. As an outside chance, they could restructure the loan over a longer period.

However, paying anything less than contractual will be marked on your files, either as an arrangement or a default. Neither will begood when you come to remortgage.

Bermonia

Your outstanding balance will accrue interest, obviously the lower your repayments the more interest that will accrue - they are simply making you aware that as you will have the debt over a longer term and paying lower repayments this will have financial implications (you’d be amazed how many people think that they can take longer to repay a debt but pay no more interest than what was agreed at the outset for a smaller term)

12bdebt3

Deleted_User wrote: »

It depends on what they decide to do. They may reduce or suspend interest. As an outside chance, they could restructure the loan over a longer period.

However, paying anything less than contractual will be marked on your files, either as an arrangement or a default. Neither will begood when you come to remortgage.

That’s what I was worried about I don’t want it to impact remortgaging.

12bdebt3

Bermonia wrote: »

Your outstanding balance will accrue interest, obviously the lower your repayments the more interest that will accrue - they are simply making you aware that as you will have the debt over a longer term and paying lower repayments this will have financial implications (you’d be amazed how many people think that they can take longer to repay a debt but pay no more interest than what was agreed at the outset for a smaller term)

Thanks, it wasn’t made clear to me over the phone so I’m glad I read ts&cs. I wasn’t attempting to pay no extra interest I would be happy to pay the 6.9% for an extra few years but if it impacts me negatively in terms of my remortgage then it’s not worth doing.

foxy-stoat

I would of thought that you could fix another deal with your current leader without them even running a credit check if nothing else changes.....but I would try and avoid getting defaults at all costs.

If your struggling with 6.9% interest then MAYBE you could get a credit card with a money transfer option and another for balance transferring.....you COULD shuffle this debt for a few years as long as you had a plan to clear it and not run up further debt. 6.9% isnt a bad rate, but the length of the loan could be the issue for you.

Post up your monthly budget and people can see if there is anything you can do, on the debt free wanna be part of the forum.

Can you increase your salary, sell stuff, down value your car, change lifestyle, reduce what you spend at christmas for a few years....am sure the family will understand if you are at a point where you are spending more than your earning.

DCFC79

Maybe you should fill out an soa and post it on the debt free wannabe board for help and advice.