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    • Twinkylu2510
    • By Twinkylu2510 12th Jun 17, 3:19 PM
    • 2Posts
    • 0Thanks
    Early settlement
    • #1
    • 12th Jun 17, 3:19 PM
    Early settlement 12th Jun 17 at 3:19 PM

    A bit of a long winded question and any advice would be greatly appreciated.
    when I did my first mortgage 12 years ago it had a loan attached to it that was separate from the mortgage. I moved last year and changed companies but the loan remained with NRAM(Northern Rock) and the rate went up quite a lot. There is still around 20K outstanding and I want to clear it off because of the interest rate but don't have the full amount. I have heard that companies sometimes do a reduced settlement, does any body know what % they normally look for and does it have an adverse effect on credit scores
Page 1
    • zx81
    • By zx81 12th Jun 17, 3:23 PM
    • 16,802 Posts
    • 17,812 Thanks
    • #2
    • 12th Jun 17, 3:23 PM
    • #2
    • 12th Jun 17, 3:23 PM
    If you have defaulted, you MAY be able to get a settlement figure. But it's very unlikely on a mortgage, as it is secured against a property and they can wait for you to sell.

    Obviously it will trash your credit files, but if you've already defaulted on a mortgage, that probably won't be a concern.
  • National Debtline
    • #3
    • 12th Jun 17, 3:40 PM
    • #3
    • 12th Jun 17, 3:40 PM
    Hi Jason and welcome to MSE,

    It sounds like you may have had a Together Mortgage and the loan is unsecured which is why it remained with NRAM when you re-mortgaged. If that is the case then you could try and do a full and final offer, but I am afraid I have to agree with zx81, that if the loan is currently up to date a settlement will be harder to do.

    Even if you were able to get a settlement agreed, it would be recorded on your credit file as partially settled which could be negative if everything right now is up to date. However, if you have missed payments/ defaulted on the personal loan a partial settlement may be more likely and be better than an outstanding default.

    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • DawnW
    • By DawnW 12th Jun 17, 6:04 PM
    • 4,997 Posts
    • 39,416 Thanks
    • #4
    • 12th Jun 17, 6:04 PM
    • #4
    • 12th Jun 17, 6:04 PM
    If you have recently moved and remortgaged, it sounds as though your credit rating is ok? If you pay less than the agreed amount, it will be reflected on your credit file, which seems a shame if all is currently ok and you are up to date with payments.

    Really depends on your circumstances. If you are simply annoyed about the high apr and the fact that you have savings to pay off some of the loan, but not all of it, your needs will be different to someone who is really struggling to keep up the repayments

    If you have a good credit rating, and are not having problems making payments, (so the first scenario above) you might think about looking at firstly a) paying off the amount that you have available, and then b) getting a cheaper loan to cover the rest, and paying it off in total? Or depending how much you are talking about, do a money transfer to a 0% card? Would that work for you? Loans seem to be pretty cheap atm. Is it worth seeing if you can get a better rate this way? Just a few thoughts, as you haven't provided much information.
    NSDs for May: 2 / 19

    • Twinkylu2510
    • By Twinkylu2510 12th Jun 17, 9:09 PM
    • 2 Posts
    • 0 Thanks
    • #5
    • 12th Jun 17, 9:09 PM
    • #5
    • 12th Jun 17, 9:09 PM
    Thank you.
    It's about the Apr and total repayable, I am
    Thinking about a shorter term loan to cover the oral amounts but was trying to avoid doing so.

    Thanks for the reply
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