Personal loans are a common part of everyday life. Whether seeking funds to take a well-deserved holiday or to fix an unexpected problem, these have enhanced our lifestyles for years.
Truly, many things in life would not be possible without a personal loan. Frequently, we use these sums to pay for education, housing, and vehicles. Furthermore, these only generally become a problem when repayments become unmanageable.
If you’re struggling to pay loans, you might feel your situation is a unique one. However, statistics demonstrate you’re certainly not alone.
According to a National Audit Office report, around 8.3 million people in the UK struggle to pay back debts such as personal loans. Furthermore, approximately 22% of adults in the UK have less than £100 available in savings.
As the population of the UK is estimated at around 67 million, this means more than ten per cent of people could struggle to pay loans.
When you miss a loan payment, initially you’ll typically be charged a penalty fee – often around £25. As well as this, additional charges may be included to cover the interest on the missed payment.
However, if you continue to miss payments, this record will have a determinantal effect on your credit score – making it harder to obtain certain financial products in the future. Eventually, continually failing to pay the loan could even result in a default notice, County Court Judgement, bankruptcy, or the lender might take steps to reclaim assets.
If you’ve missed around three loan payments, the lender will usually issue a default notice. A formal declaration, this indicates your loan, the payments you’ve missed, and what you should do to rectify the matter.
Once you’ve been issued with this notice, it will get added to your credit report. This indicates to other lenders that you’ve failed to keep up with loan repayments before.
A County Court Judgement (abbreviated to CCJ) is more serious than a default notice. A court order, this indicates the amount you need to pay back within 30 days. If you’re unable to do so, then a CCJ stays on your credit report for six years.
Similar to the default notice, a CCJ will make it much harder for you to obtain loans in the future.
If you cannot possibly afford to pay back your loans, you may be declared bankrupt. In this situation, you could lose your assets and the bankruptcy notice will get added onto your credit report. Even if you get your finances back on track, lenders will be very unlikely to provide you with credit in the future.
If you’re unable to repay your loan, then you should initially speak with the lender. In some situations, they’ll be able to work out a more favourable repayment plan or give you extra time to get your finances back on track.
If your lender refuses to alter the terms of your loan, then you should consider debt consolidation.
When personal loans get on top of people, many won’t admit they need to do something about it. However, just by viewing this web page, you’ve made the first and hardest step to regaining control over your finances.
Our advisors have heard just about every situation and assisted thousands of people in resolving their personal loans. Get in touch today and we can talk to you about debt consolidation.
Debt consolidation can be a great solution for resolving multiple personal loans. By borrowing a sum equal to – or greater than – the combined value of these debts, you may be able to resolve all these obligations while just paying one affordable monthly payment.
Get in touch today, and let’s discuss if a debt consolidation loan can help you.