Do I pay off my loan or risk defaulting?

For any money-related worries.
Forum rules
NEW USERS HAVE TO WAIT FOR THEIR FIRST POSTS TO BE APPROVED BY AN ADMINISTRATOR. Rules | Essential Information | FAQ | Support | Twitter

Should I pay my loan off now?

Yes
4
100%
No
0
No votes
 
Total votes : 4

Do I pay off my loan or risk defaulting?

Postby u_l_g » Mon Jan 26, 2009 5:09 pm

Our financial situation in a nutshell:
My boyfriend and I live to together have been made redundant and struggleing to find new jobs.
We have enough money left from wages to last two more months in our current rented home (we have to give a months notice though)
We have £2000 in savings, which would buy us another two months living in our home
We have no debts apart from our car loan - the settlement figure for this would be about £2000 now
Once all this money is gone we will literally be at 0. We would become fully dependant on whatever benefits the government would give us (another problem - we have no clue about how to live this way 8-[ )

We can't decide whether we should use our savings to pay off our car loan or buy us another 2 months without work?
If we pay off the loan we will become benefit dependant much sooner but would be debt free.
But if we used the savings to live off and still didn't find work we'd still end up on benefits but would have a loan we couldn't pay.

We have both got good credit records so far and want to avoid losing this if possible but also don't want to lose our home. We hope of course we'll find work but we have to consider what happens if we don't. Any advice?
u_l_g
One of the Crowd
One of the Crowd
 
Posts: 60
Joined: Mon Feb 18, 2008 12:20 pm

Re: Do I pay off my loan or risk defaulting?

Postby Pigglet » Mon Jan 26, 2009 8:20 pm

Is there any cance that the finance company could help out by letting you take a payment break or something similar, I know it would be a short term solution but would it help a little? Or even if you could reduce the minimum payment then perhaps you could afford to stay living in your home and still keep the payments going for a while! When you get you're benifits sorted out!

On the other hand, if you have somewhere else that you could happily live and afford I would be tempted to pay of all outstanding debt and have a completely clean slate!

Were neither of you entitled to a payout from your redundancies?

Whatever you decide I would make your finance company aware of your situation so that you will be less likely to end up with bad credit!

And just for the record.... Congratulations on only having small debt between you, not to be sniffed at in this day and age I would say! :D
Just remember, nobody can make you feel inferior without your permission. :D x
User avatar
Pigglet
Familiar Face
Familiar Face
 
Posts: 124
Joined: Mon Jan 12, 2009 12:00 am
Location: South Yorkshire
Gender: Female

Re: Do I pay off my loan or risk defaulting?

Postby Bel Bel » Tue Jan 27, 2009 10:13 am

I believe when renting a credit check is run so if you default on the loan then you risk not being able to rent in the future
I would always opt for the clean slate
Two months is not that long so I would start exploring your benefit rights now and be prepared to go this way
Do wither of you have the opportunity to move back home if you don't get a job as this will obviously ease the burden on you finacially
Life is for living so live it to the fullest

Cheap Pandora Charms UK

User avatar
Bel Bel
Fully Fledged Flatmate
Fully Fledged Flatmate
 
Posts: 6758
Joined: Thu May 10, 2007 1:58 pm
Location: Hertfordshire
Gender: Female

Re: Do I pay off my loan or risk defaulting?

Postby u_l_g » Tue Jan 27, 2009 2:51 pm

Even reduced payments on the loan probably wouldn't help to be honest, because removing the full £100 a month it costs won't help us last much longer in our home.

If we do go on benefits we will have to move out of our house (because housing benefit would only pay half the rent on our lovely pad :( ) We'd have to move somewhere pretty grotty compared to what we're used to, and wouldn't be able to afford to run our car anymore. It would be a massive lifestyle change and shock to the system we are desperate to avoid really. (We can't go home - none of our parents will have both of us together and it would be hard to get to even see eachother - splitting up like that is just not an option for us)

Thanks for your input - i think i might have to just pay the debt off and start with a clean slate because it's taken years of hard work to do everything the right way to get what we wanted without getting into debt - it would be such a shame for all that hard work to have gone to waste. At least when things do get better we'll be able to get credit again in the future.

Its just hard to accept where we are going to end up now. A university degree, plenty of experience, a hardworking nature and a lot of effort putting into doing everything "right" in life, and by the age of 25 I'm facing the life I've always worked so hard to avoid. Its just hard. :cry:
u_l_g
One of the Crowd
One of the Crowd
 
Posts: 60
Joined: Mon Feb 18, 2008 12:20 pm

Re: Do I pay off my loan or risk defaulting?

Postby Bel Bel » Wed Jan 28, 2009 3:22 pm

You could try temp work. I know it isn't a perfect answer but at least you will be earning and you can still look for another job whilst having an income.
I know Asda are opening 15 new stores so not everyone is bitten by the recession and therefore there are other jobs out there. Ruth and BRFC have just got new jobs.
You may have to take a cut in income or do something you wouldn't have previously considered but it would be worth it if it meant you could stay in your current home.
I hope things work out for you
Life is for living so live it to the fullest

Cheap Pandora Charms UK

User avatar
Bel Bel
Fully Fledged Flatmate
Fully Fledged Flatmate
 
Posts: 6758
Joined: Thu May 10, 2007 1:58 pm
Location: Hertfordshire
Gender: Female

Re: Do I pay off my loan or risk defaulting?

Postby miaow » Sun Feb 01, 2009 4:29 pm

I was going to say get some temp work or go to local supermarket and see what work you can get there, until I read Bel Bel's post and realised she'd said same thing.

I would pay off car loan, go get some temp work (both of you) and keep with it until you find a job in the field you want. You may have to give up your pad (kak I know) but least you would be earning your own money, going out and doing something in the week so you wouldn't be wallowing in self pity, and should get more than you would on benefits so could get a smaller place to live which you could still call home and would be nicer than a grotty one you'd get if on benefits.

Stick with it - things will get better, just have to ride it out.
User avatar
miaow
Familiar Face
Familiar Face
 
Posts: 422
Joined: Thu Feb 28, 2008 4:12 pm
Location: Lancashire

Re: Do I pay off my loan or risk defaulting?

Postby dogtan » Wed Feb 18, 2009 9:59 pm

You will get through this I would get some advise on your situation to be honest, try Natioanl debt line.

You have several options but I think you have to prioritise on whats most important to you.

What ever you do stay realistic but postivie.

You prob need to realise that if you want to continue to live with your partner you will have to change your lifestyle dramaticly until your situation stabalises.

Belive me you are not alone and you will get through it.
User avatar
dogtan
Regular Visitor
Regular Visitor
 
Posts: 18
Joined: Wed Jan 28, 2009 11:47 pm

Re: Do I pay off my loan or risk defaulting?

Postby dadadadabatman » Thu Apr 23, 2009 11:04 pm

DO NOT default on your loan.. it will haunt you for years. No loans, no credit cards, no monthly phone, can stop you getting certain jobs etc. I am only getting back on track now after 5 years in the credit wilderness!
dadadadabatman
Regular Visitor
Regular Visitor
 
Posts: 11
Joined: Wed Apr 22, 2009 11:27 pm


Return to Finances

Who is online

Users browsing this forum: No registered users and 2 guests