I am not much help.. mainly because I do not know anyone or been this stupid to get in this mess, therefore not sure of solution, i already adviced Solicitor and CAB to him.
Friend in debt with logbook loan
- Thread starter BoyceyLDN
- Start date
I am not much help.. mainly because I do not know anyone or been this stupid to get in this mess, therefore not sure of solution, i already adviced Solicitor and CAB to him.
Soldato
A good starting point for your friend would be to get the facts accurate. He likely borrowed £3,800. £12,000 is likely the total amount repayable during the loan term, £8,500 is likely the amount remaining to be repaid during the loan term and £4,000 is likely the actual principle debt owed. The latter could easily be higher than the original amount loaned, even after a year of repayments, as there were probably all sorts of fixed arrangement fees added when the loan was advanced, and a number of repayment fees being levied at the end too.
Handing over the car will not end the loan agreement. The company already owns the car. All it would likely achieve would be that they'll sell is a realise a fraction of its actual value plus charge all manner of fees for the privilege of doing so. If there's anything left, they'll take that off the outstanding balance which he will still have to pay.
If I was him I wouldn't panic. He's starting from a position of relevant stability as he had enquired about repaying the loan. Begin by asking for a subject access request on all the data the business holds on him, including copies of the application and appropriate disclosures at the point of sale. While they're taking their 40 day allowance to do that he can look around and see if he's able to consider other options, such as arrange alternative cheaper finance to swap out this horrible 300% APR arrangement with.
He lost his job and was desperate for money to pay bills, was a very stupid thing to do i agree, but then it's easy to point the finger at any situation, debt, gambling, alcohol , obesity issues etc. Like i said i have told him he's been very stupid and naive but this debt is already getting him down.
Thank you for the reply, i have explained to other users giving the car over will not clear the debt. He is not panicing but obviously wants to get this resolved. Unfortunatly his credit rating is bad so can't get a loan / credit card.
Soldato
This is a relatively normal situation discussed on these forums - usually it is credit card debt or some other high APR debt though.
The normal routes at this point will be the possibility of a loan from friends or family, if he doesn't want to go down the repayment plan route and the associated pain. At his current repayment rate he'd pay them back in 14 months.
The normal routes at this point will be the possibility of a loan from friends or family, if he doesn't want to go down the repayment plan route and the associated pain. At his current repayment rate he'd pay them back in 14 months.
Before he goes get him to email the loan provider and tell them to to send him a copy of the agreement and terms (as the CAB / solicitor would need to see this before they can advise anyway) ASAP. If they don't provide it within 48 hours chase again. Then if still nothing take the legal advice anyway
Soldato
This is the thing with debt. It can very very quickly spiral.
Having been in debt myself, I know it is a hard topic to discuss. As well as Legal Advice I would recommend StepChange. They can present a lot of support for you.
Getting into debt should in my view only be for a house, a business and maybe a car.
I'm sitting comfortable now and won't be making the mistakes again. This will hopefully be a lesson for your friend!
Having been in debt myself, I know it is a hard topic to discuss. As well as Legal Advice I would recommend StepChange. They can present a lot of support for you.
Getting into debt should in my view only be for a house, a business and maybe a car.
I'm sitting comfortable now and won't be making the mistakes again. This will hopefully be a lesson for your friend!
Soldato
- Joined
- 11 Sep 2013
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NVM
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It will sell, you just need somebody that will trust you clearing the finance at the same moment they give you the cash. Or if he knows somebody that is willing to clear the finance for him whilst he waits to sell the car that would be a plus.
Ultimately, the only clear way it seems for your friend to get out of this is to clear that £4,000. There may be alternatives but nothing obvious is coming to mind.
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Soldato
Get a credit card or loan to cover the 4k settlement?
Soldato
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- 23 Nov 2004
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- 10,646
May be worth speaking to his bank and showing what he's been paying comfortably to get a loan at a better rate.
I ended up taking a loan at about 19.5% to consolidate debt(4 cards, a loan and an overdraft) and after 3 months of paying the stupid rate was able to get a loan for the same amount and term at 3% with tesco bank.
The initial sit down at the bank did mean the guy was on the phone to get things approved/explain what the plan was going forward and evidence I had been paying more per month managing the debt rather than reducing it.
Scary how quick it gets out of hand, I paid a payday loan off for a friend a few years back but even with it settled I think they are still looked upon quite badly by equifax and the like.
I ended up taking a loan at about 19.5% to consolidate debt(4 cards, a loan and an overdraft) and after 3 months of paying the stupid rate was able to get a loan for the same amount and term at 3% with tesco bank.
The initial sit down at the bank did mean the guy was on the phone to get things approved/explain what the plan was going forward and evidence I had been paying more per month managing the debt rather than reducing it.
Scary how quick it gets out of hand, I paid a payday loan off for a friend a few years back but even with it settled I think they are still looked upon quite badly by equifax and the like.
Wonder if that 4k settlement figure is with them keeping his car as well
Soldato
Just what level of stupid do you have to be in order to take out a loan without finding out the interest rate before signing your name?
My Mum always used to say "Remember, the average IQ is only 100!"
(And 1:5 people are below 85.)
Now, I dont believe that IQ tests and IQ score represents a raw assessment of intelligence as such. Many aspects of the standard test involve verbal and numerical skills. Both of which are learned rather than something that you are born with. But it does provide a good indication as to how well an individual is intellectually equipped for living in a developed society. And people who (For whatever reason) only achieve a low score are unlikely to perform particularly well.
(People with very high scores dont always perform well either. but in the range 80-120 it is a fairly good predictor)
(People with very high scores dont always perform well either. but in the range 80-120 it is a fairly good predictor)
Man of Honour
And more dangerously, 'most everyone believes a) IQ is a thing you can quantify in one number and b) they're near the top end or you know at least "pretty good"
Soldato
Let’s not confuse intelligence with desperation.
How long was the loan for? Given it is 300% APR and total payments are 12k, I am guessing something like 2 years.
Barely made a dent in the principal. A settlement is allowed to charge 60 days of interest though, and uour friend sounds like is paying a variable amount i.e. less than he needs to sometimes.
What your friend needs to do is go to CAB. They will deal with things like this all the time.
They will also have to answer to the financial ombudsman service if they don't reasonably deal with any complaint.
Barely made a dent in the principal. A settlement is allowed to charge 60 days of interest though, and uour friend sounds like is paying a variable amount i.e. less than he needs to sometimes.
What your friend needs to do is go to CAB. They will deal with things like this all the time.
They will also have to answer to the financial ombudsman service if they don't reasonably deal with any complaint.
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