Help - Personal Loan Repayments & Financial Harship.

Goldilocks663

Hi - I just wanted some advice really as I’ve never been in this position before.
So I’ve had a personal loan for a few years now, there’s around £7,700 remaining and in approximately May 2024 my loan repayments were reduced due to me only working part time following having a baby. This was reassessed again in November 2024 and the repayments were reduced even further for another 6 months until May 2025. I advised that I will be going back into full time work in February 2025 so I will be able to contact to go back to the original payments.

This weekend I received a ‘final demand’ letter saying I basically needed to pay off the £7,700 in full by 28th January else it’ll be passed to the repayments team and a risk of my account being closed. I spoke to a lady in branch 2 weeks ago who advised me that the bank can just extend my loan term to repay what may be owed and not to worry too much. I called immediately following the letter and advised that the previous caller in November/lady in branch told me to ignore any letters that come in about arrears as I have an agreement in place, not to worry and asked if they can extend my term. They firmly told me this cannot happen and apologised for the misinformation. They said this will be passed to the repayments team to discuss my repayment of the arrears owed, which I believe is about £1500, and there’s nothing else they can do. They said the repayments team honour the current repayment plan I have with them and then see what the best solution is.

My question is - what can happen through the repayment team? Can they close my accounts off? Get legal teams involved? I suffer from some mental health issues following having my baby (which the bank also know), so I’m panicking here. I’ve never missed payments, just had to have it lowered for the last 9 months due to fewer hours at work. Just looking for some advice really.

Thank you.

fatbelly

Your credit file is probably being marked Arrangement. Have you checked? The worst they can do in the short term is change it to Default.

Many posters here would say that is an advantage.

A lot of letters are just required by law and guidance. So don't pay too much attention to them. Pay what you can comfortably afford. When your income increases, pay more if you want to.

This is nonpriority debt so the most likely event is the account gets shuffled sideways for someone else to collect.

sourcrates

No need to panic, all that will happen if your account goes to collections, is that a more affordable repayment plan can be agreed.

You have got to the point where your agreement now needs to be administered by a different department as you have not been making contractual repayments as per your original agreement, they will only allow this for so long.

Collections has more discretion to agree terms that are affordable for you, that's all, your account may default or be closed, but you can still repay it via monthly repayments.

Just to further clarify, if you can`t make an agreement with collections, it will go to a debt collector who will have even more discretion, so don`t worry, the letters are required by law, nothing to fear from any of this.