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Secured loan to pay off DMP
Hi
I’ve got a DMP, it’s over 6 years old, I’ve paid off chunks as and when I can when I get a bonus from work or have spare cash, but I’ve still got 18k left on it. We want to move house in the next couple of years and use some of our equity to clear the DMP, but know that any decent lender won’t look at us with a current DMP. I really want to get rid of it ASAP, get straight/improve our credit for a couple of years, and then move.
Our loan to value is currently 47%, we have nearly 100k equity in the house. Contacted our lender (NatWest) to see if they would let us borrow extra on the mortgage to clear it off but they’re not interested.
So now I’m looking into secured loans. Are there any reputable ones out there who won’t rip us off? We’re ‘pre-approved’ for ocean finance apparently, but I’m concerned they might be a dodgy one!
Any advice welcome.
I’ve got a DMP, it’s over 6 years old, I’ve paid off chunks as and when I can when I get a bonus from work or have spare cash, but I’ve still got 18k left on it. We want to move house in the next couple of years and use some of our equity to clear the DMP, but know that any decent lender won’t look at us with a current DMP. I really want to get rid of it ASAP, get straight/improve our credit for a couple of years, and then move.
Our loan to value is currently 47%, we have nearly 100k equity in the house. Contacted our lender (NatWest) to see if they would let us borrow extra on the mortgage to clear it off but they’re not interested.
So now I’m looking into secured loans. Are there any reputable ones out there who won’t rip us off? We’re ‘pre-approved’ for ocean finance apparently, but I’m concerned they might be a dodgy one!
Any advice welcome.
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Comments
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What do you mean by “dodgy”? Consumer lending in the UK is highly regulated, and the terms and conditions that you sign at the start of the deal are what apply to you throughout, so it’s not as though any company can just change the rate or add charges that weren’t there in writing at the start.
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GeordieGeorge said:What do you mean by “dodgy”? Consumer lending in the UK is highly regulated, and the terms and conditions that you sign at the start of the deal are what apply to you throughout, so it’s not as though any company can just change the rate or add charges that weren’t there in writing at the start.0
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Ocean Finance are a non prime broker not a lender and add a fee on top of the loan - they find you a loan between 5.1% and 89.9% which is pretty much why they can pre approve almost anyone and with a DMP you are not going to get anywhere near the bottom end - your are unlikely to get a loan that is not going to "rip you off". A loan secured on property to pay off debt is rarely a good idea - "Your home is at risk if you fail to keep up with the payments" - so if another curve ball is thrown you could find yourself in a B&B !. If you want to move and release some of the equity it would likely be best to speak to a specialist mortgage broker.
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Timbo40 said:GeordieGeorge said:What do you mean by “dodgy”? Consumer lending in the UK is highly regulated, and the terms and conditions that you sign at the start of the deal are what apply to you throughout, so it’s not as though any company can just change the rate or add charges that weren’t there in writing at the start.3
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If you're on a DMP presumably your debts have defaulted so you're not paying interest? I'm not sure why you'd want to turn interest-free debt into what will almost certainly be high-interest rate debt, secured on your home to boot.
Having a large loan is going to have a significant impact on affordability for the mortgage as well.0 -
Don`t do it, interest rates tend to be high, and variable, miss a payment, the charges alone can add up to £50 or more.
You should look at other, more inventive ways to clear the debt, for example, are all your debts enforceable, have you submitted CCA requests ?
Are all your accounts defaulted and sold on ?
Debt purchasing companies are much more open to settlement deals, anywhere between 20 & 75% discount can be achieved if your are persistent and keep at it.
Borrowing to pay off existing debt, especially secured borrowing, is just a folly in most cases, and can lead to you losing the house if life throws you another curve ball, as another poster pointed out above.
Basically its a very bad idea, when other, more sensible options are available to you.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
As your in a dmp your not meant to take out more credit, have you spoken to who your dmp is with, maybe they will lay things out for you.0
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DCFC79 said:As your in a dmp your not meant to take out more credit, have you spoken to who your dmp is with, maybe they will lay things out for you.
However, its a really bad idea anyway.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter1
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