If you have an IVA, you may find it difficult to get a loan from a traditional lender. However, you may be able to find a loan through a specialist lender. These lenders are available through lending advisers and lending brokers who have access to the whole market. You can also settle your IVA early, which will free you from the restrictions of the IVA and help you build your credit score. An IVA stays on your credit file for six years.
Unlike with unsecured loans, secured loans require consent from creditors. If you do not pay off your secured loan, your creditors can resell it. The advantage of this solution is that you do not lose your home or any assets. Depending on your circumstances, this might be the best solution for you.
A secured loan can be cheaper than a remortgage. This is because your payment for a secured loan is usually included in your expenditure calculations. In contrast, when you have a repossession, you can often end up with debt that is unsecured. In such a case, you can use the IVA to include your unsecured debt.
The downside of an IVA is that it can make it difficult to access credit and loans. When you do apply for a loan in an IVA, your IP will need to approve it. In addition, an IVA has strict restrictions which prevent you from taking on further debt. If you exceed these restrictions, your IVA may be terminated and you may be facing legal action.
If you are struggling to make your payments on a secured loan, there are various ways to relieve your situation. One of these options is Individual Voluntary Arrangement (IVA). This is a court-approved debt solution. It will prevent creditors from contacting you for a specified period, and they will not be able to add additional interest to your debt.
When deciding on an IVA, you should also consider the cost of the loan. Depending on how much equity you have, you may find it hard to get a loan at a competitive rate. In addition, you should take advice from an IP before taking a new loan. Otherwise, you could end up losing your home.
If you have equity in your property, you can remortgage it to raise a lump sum for the IVA. However, you must remember that the amount of remortgage will depend on how much equity you have in your home. In other words, if you remortgage a property worth more than your current mortgage, you will not be able to raise the lump sum needed.
You may be wondering whether you can include a secured loan in an Individual Voluntary Arrangement. Although you can include any amount of debt in your IVA, you should note that if your debt is under PS10,000, your creditor may not accept it.