www.iva.co.uk

Hi,

Help please !

I had a call from Perinta Finance offering early exit loan. I have a balance of 13300 which will finish in 38 monthy payments. Perinta Finance offered me a loan for 24,500 which will last for 70 months. Is it any good in improving my credit as i need to relocate and sell my house buy another one.
Any suggestion please...

Hi and welcome,

Think long and hard about this - you will be getting yourself into deeper debt.

Chances are you won't get a mortgage to get a new home anyway.

I would continue on with your IVA.

as said, you won't get anew mortgage for at least 3 years. The Perinta loan will do nothing to improve your credit rating in the meantime and the sales people ( for that is what they are) are, frankly lying to say otherwise ! Maybe a case for mis-selling in the future!

Have a read here, including the comments:

http://debtcamel.co.uk/perinta-loans-end-iva-early/

Another unsecured loan will affect your affordability when it comes to borrowing in the future. Stick it out as it would be better for you or alternatively look at a secured loan if you are desperate to get out of the IVA. An unsecured loan is between 30 and 40% which is much higher than a secured one.

Why would you want to swap a debt of £13k over 40 months for a debt of £25k over 70 months?

Makes absolutely no sense to me.

Another point to consider -- if you fall on hard times you can negotiate a payment break in the IVA and catch up later -- no harm no foul., If you fall on those hard times and miss a loan repayment you will be collecting warning flags on the credit file and might even have to go into a debt solution to pay the debt solution !!!

Good point Foggy!

I had a call also from Perinta Finance offering an early exit loan. The lady on the phone was helpful and explained everything clearly & not pushy in anyway. By the end of the call she suggested that the loan was not in my best interest as the interest would be £6000. This surprised me.

There may be some people with IVAs in a unique position where an early exit loan could be useful. A distasteful example I can think of is where you may have a relative who is about to ‘shuffle off this mortal coil’ and bestow a sizable lump of greenback in your direction. You could take the loan to be free of IVA restrictions, then pay the loan of as soon as possible when payday comes, incurring as little interest as possible & preventing the IVA Company getting their hands on your loot.

Personally speaking I entered an IVA to be free of debt not get more.

If I had had an inheritance then I would have been happy to use it for that.

Foggy, why would it not improve one's credit score to have a substantial loan on there, all up to date and in fact paid off successfully?

I'm not saying these loans are good or bad I'm simply curious as to why you said it won't help the credit file?

All adverse information stays on your credit file for six years so taking the loan early will not remove the IVA from your credit file. In addition when the six years have passed, you would have no debt had you remained in the IVA whereas taking a loan with a sub prime lender will severely impair your affordability and thus ability to borrow.

Furthermore, if the loan is with a specialist lender who only advances to those in IVAs an underwriter may fathom that the loan was taken out to clear an IVA and even though there is no mention of the IVA on the credit file, a prospective lender may work out that you had one.

In my opinion I think these type of loans will do more damage than good but I am no expert.

I concur Michael.

Valid point about Perinta appearing on your credit file.

I do think that about people like Capital One and Vanquis too because although they do good on your credit file, don't they also ring warning bells of bad credit in the past if not present?

Same about settled accounts with obvious names like Max Recovery or Fleecem Debt Collectors etc...

I don't think Capital one and Vanquis are too bad. Once you have finished though then debts will be wiped from your account.

The likes of Vanquis and Capital One, and others of that ilk, also give starting credit to those with no recent credit history for other reasons, so an IVA isn't always the first thing that would spring to mind, whereas this particular product is targeted at IVA'ers.