Problems With Loans
Problems With Loans
Robert Sinclair (Director, AFB) gives expert video advice on: What do I do if I change my mind and want to cancel my loan?; What is a redemption figure?; What do I do if I can't afford to repay my unsecured loan? and more...
What do I do if I change my mind and want to cancel my loan?
The first thing you should do is contact your lender. Advise them that you wish to cancel the loan, repay it early, and they will then give you a redemption figure.
What is a redemption figure?
Redemption figure is the amount of money that you have to pay back to the lender in order to meet your liabilities under the law. This will be the amount that you've borrowed plus the interest rate and the additional amount of interest depending on the contract you have with the lender. So that's almost nearly the only payment to charge.
What do I do if I can't afford to repay my unsecured loan?
The first thing you should always do is contact the lender, and advise them of your position. If you'd asked them to help you, in terms of either rescheduling the loan or asking for a repayment holiday, and therefore you're effectively adding that last repayment onto the loan at the end. Some lenders will allow this, others will not, but it's up to you to try to negotiate that with the lender.
What happens if I miss an unsecured loan payment?
The main effect missing a loan payment has on you is that it will show on your credit history, therefore it makes it harder for you to get another loan and will impact on the interest rate that you will pay if you try to get any borrowing at some future date.
What can I do if I've been refused an unsecured loan?
You can ask why. The main reason for loans being refused is that there's something in your credit history which is adverse. The thing to do is ask what that is, and it may be that history is incorrect for a number of reasons or it maybe correct. It's important to establish the facts and then establish with the lender whether that is the right situation or not. You may then have to go to some of the credit reference agencies to have that put right and that may repair your credit history and allow you to get a loan.
What do I do if I can't afford to repay my secured loan?
The first thing you must do when you can't afford to repay your secure loan, is to contact the lender, make them aware of the position and ask them to reschedule the loan or give you a payment holiday. If they're not prepared to do that then you can look to see if you can refinance the secure loan elsewhere. If that can't happen then you're in a difficult position and this may result in you loosing your property.
What will happen if I can't afford to repay my secured loan?
The first thing you should always do is contact the lender and make them aware of this. If you genuinely at that point can't afford to make your payments, the lender has the choice to effectively put the loan into default, to go to court and take action against you, get a debt judgment against you, and then they have the right after that to go to the court and take possession of the property. At that point, if this is a secured loan, you also have the mortgage. The first mortgage will become involved in the discussions and debate. And therefore, a period of negotiation may ensue in order to protect all of their possessions.
What happens if I miss a secured loan payment?
If you miss a secure loan payment, you should advise the lender of the position you're in. Really, most lenders will just add that loan repayment onto the end, so make your next loan repayment if you can, and carry on making repayments on the loan. But have discussions with the lender in order to advise them of the position you're in.
What can I do if I've been refused a secured loan?
You need to ask the lender why you've been refused. In most cases, this is because there's a problem within your credit history somewhere, or that you don't meet their requirements. Establish what those facts are, and that may allow you to repair the credit history, because there may be some errors in there. Or, there may be something you have subsequently satisfied that you can satisfy them on.
How does bad credit affect my ability to get a loan?
If you have a bad credit history, this is recorded on a number of systems by credit reference agencies. The vast majority of lenders look at those credit reference agencies, and make a judgment based on mystery payments, or whether you have county court judgments against you. There are a number of lenders out there who will still lend to people who have bad credit histories. However, that is reflected, normally, in the rate of interest that you have pay. You will pay more in interest if you have a worse credit history.
Can I get insurance against my loan in case of unforeseen problems?
Insurance against loans is something called human protection insurance. Human protection insurance protects against normally accidence, sickness and unemployment. Some companies also give life cover in these types of products. This can be either on the regular premium basis or a single premium which can be added to the loan and paid off over the term of the loan.
Is it a good idea to get insurance against my loan?
Many customers take insurance on the loan because this gives them piece of mind. What you have to be careful of is that this does not duplicate existing cover. Many customers may have sickness support from their employer, or they may have other insurances like income protection, which give them comfort in that situation.
If I can, is it a good idea to pay off my loan early?
It should always be better to pay off a loan early, in that this will avoid you making some of the interest repayments. You should always be careful, however, to make sure that any early repayment charges that are part of the loan do not exceed the benefit of doing so.
What is a County Court Judgement (CCJ)?
A county court judgement is where a lender goes to the courts and proves the debt against an individual. This means that amount of the loan, plus any interest, is recorded by the courts against the individual. What is known as a county court judgement is then registered. This allows the lender to then either take goods or property from an individual, but also leaves a credit footprint against the individual, which tells other lenders that the person in question may be a bad risk for further borrowing.
What is a Debt Judgement?
Debt judgement is very much the same as a county court judgement where somebody has gone to court and proved a debt against an individual.