I want to borrow (again) - to clear the £700 and the
Visa £1,103 and raise a little extra to do desperate
home improvements (eg need a new toilet as my exisiting
one floods around once a week - nice task to come home
to after a hard day's work!, I need fresh guttering, I
have rotten back window frames, my shed is leaking as it
needs a new roof, not really too expensive home
improvements but coupled with my above debts and other
little loans I have worked out that if I don't borrow to
clear the £700 and the £1103, these will take me 8 years
to clear at their current reduction rate so I will still
be in debt so I might as well take out a loan for £5K
over 10 years pay these off, be able to buy a cheap car
or repair my existing one and raise money desperately
needed to do my little home improvements.
Please respond to this email, as I don't want to take
any further silly actions which are going to put me
longer in debt and because of my poor credit rating it
seems that if I borrow again the actual repayment cost
of a loan would be near on double? Any suggestions or
help?
Reply
As you say, “only just come up from my
life sentence of 6 years” just for some individual to
send you a Default Notice thereby giving you another 6
years of credit application hell. I am disgusted at the
simplicity of creditors to affect a person’s credit
rating by issuing a Default Notice. I have been the
creditor in many such situations and seem abuse of the
system beyond belief. If you are saying in your message
that the creditor defaulted you after your arrangement,
I would tell them to remove it NOW! The only reason I
can think of for sending the default is so that:
A) The creditor can take immediate legal
action should you not adhere to the debt arrangement,
but once you adhered to the payment arrangement the
default should be scrapped, or removed from all credit
reference agency files.
B) Or that they terminated the account
(i.e. the agreement is no longer in force whereby you
pay x amount per month, but that the whole balance is
payable immediately and they accept a payment proposal).
To terminate the agreement the creditor must send you a
Termination Notice. No notice means no termination. Ask
for a copy.
By the way the default information will
not be removed if you pay in full: you can only get a
note placed beside the default saying ‘satisfied’.
As to your existing debts. You cannot suffer further
from your existing creditors: unless your situation
changes and you fail to ‘play ball’ with your creditors
and up your monthly payment. With a £5,000 loan costing
between £140 - £175 per month over 5 years (you
probably, if passed, paying the £175 per month). One
year at £175 per month is £2,100, enough to clear your
debts if you put this money into paying off your current
creditors.
Personally, I would take the opportunity
to settle all debts and maintain a credit balance with
my bank. I would send a letter to my bank outlining what
I was doing and say that you are looking for their
support in providing a loan in twelve months time. This
last bit is not advice, just an observation. With the
many problems you have with your house and car it is
likely that you will not have sufficient money to
rectify the faults to a satisfactory level: satisfactory
would mean not having the same builders in within 12
months. One of the biggest mistakes in money management
is to attempt to repair faults that will reappear: sort
out the faults on your house and car when you can afford
permanent solutions.
I know the above is not exactly what you
want to hear, but it is the quickest solution and the
best option from a personal finance view. A loan is
tempting in the very short-term, but will quickly turn
into a millstone of little or no benefit. |
