Creditfix: IVA 'Early Exit Loan'

[lifenoteasy]

Michael - how can you shop around if it requires the permission of the IP to get credit over £500?

There is only one offer on the table because that is all they will agree to.

[Michael Peoples]

There is no obligation to use the IPs recommended financial advisor as there is no obligation to take out the loan. However if the idea was appealing then speak to other financial advisors and compare interest rates and costs.

If for example CF's preferred advisor was charging a rate higher than say Shaun Vickery's firm then you can go with Select. You just request a variation based on a loan for a full and final settlement and if approved the funds are paid to the IP. The IP cannot refuse permission for a loan if the creditors have already accepted the variation for a full and final settlement.

It is possible that an IP may want their clients to use their preferred advisors if they are receiving commissions, but the IP cannot stop you from obtaining the loan elsewhere at a cheaper rate or even interest free from family.

[UpToMyNeckInIt]

Michael,

Thanks for the further clarification - I shall be sure to ask the question about the possibility of shopping around for a cheaper lender.

I was thinking along LNE's assumption - ie: that I would have to use 'their' provider.

I am almost certain that this offer is just CF's way of making a bigger profit from an IVA that they have brought from my old company.

Just tried phoning CF - gave up after 15 minutes on hold, so I have emailed them asking for a call-back for more details.

Freeing myself of the IVA terms relating to overtime, windfalls/PPI and equity release are some of the big draws, but I am not going to pay through the teeth for the privilege either.

I'm 4-Years in with 2 more to go most likely. All things considered, I have been fortunate in coping pretty well thus far.

I appreciate the need to tread carefully with this enquiry - I'm sure that the rub to all this will be:

1). Lower repayments, but more of them, totalling significantly more than I anticipate paying back over the remaining 2 years;

2). Extortionate interest rates apply; and / or

3). Requiring me to accept a more modern IVA protocol allowing equity release via secured loan for my application to be accepted. That way, even if I decline the loan offer right now, they will more easily be able to screw me come attempted equity release time in Month 54. (Right now, I anticipate only a 6th year of repayments).

If any of you can think of further potential pitfalls, or questions to ask about this 'offer', I am happy to to put these to CF, and I will update the forum with the relevant outcomes.

[watzki]

I would imagine creditfix have a financial company behind them,like freeman jones have think money.
IVA companies in my opinion are just all out to make a massive profit out of people's misery.
I'm so glad I've almost finished I really fear for people starting out on trying to sort their debts out

[Michael Peoples]

There are advantages to early settlement and one or two of our clients will close down each month using a secured loan. If you use a reputable and established financial advisor they will come back to you after two years and look to remortgage you down the High Street so while the initial interest rates may be high it should not be for a long period. Indeed your own mortgage company may even advance the funds to clear the secured loan once your credit file has cleared.

If you do put forward a full and final make sure no one tries to sneak in any changes to the terms and conditions so if the offer is rejected the IVA just reverts to what it was originally. It is a straightforward take it or leave it offer.

Finally, your secured loan should not cost more than 50% of your IVA and do not raise any more than would be paid via contributions for the remainder of the term. Any decent broker can work this out for you and tailor the length of the loan to the amount raise and the monthly payment. For that reason alone you should shop around and do not be bullied into borrowing more than is actually needed.

[UpToMyNeckInIt]

Update: Been passed to Credit Fix’s approved provider – ‘Just Lending’.

When I googled them, this was the top result: http://www.iva.co.uk/forum/topic.asp?TOPIC_ID=75862

So clearly a division of Creditfix, or a very closely affiliated company.

Anyway, got a call back from JL, and prepared myself for the attempted hard-sell of a secured loan.

I needn’t have worried: Apparently this particular ‘early exit loan’ product is unsecured, and aimed at IVA customers, who are not homeowners, so I should not have been referred in the first place.

I was told that this is on the basis that creditors do, generally speaking, want homeowners to attempt equity release.

Apparently JL are the only company offering a product of this type.

So there you have it: If you are an IVA customer, non-homeowner, who wants to turn the reminder of your IVA into an unsecured loan, in exchange for being released from the IVA restrictions, it might be worth enquiring.

[kallis3]

To be honest, if I am a non home owner I would not want to take out a loan and just let my IVA run the five year course.

[Michael Peoples]

I suppose it depends on whether it is in your interest. If for example you were due a promotion or regularly paid large amounts for overtime and bonuses it may be attractive but otherwise I agree with Kallis that it may be better to just let the IVA run.

[kallis3]

I entered my IVA to get out of debt, not take extra on. Of course it is each to his own.