If you have taken out an ecured loan and are in arrears, it might be worth thinking about an IVA. An IVA is a type of debt solution that helps you repay your existing debts in a flexible way. You can arrange flexible monthly repayments and even pay off a portion of your outstanding balances early. The key is to choose an IVA that suits your individual circumstances. If you’re unsure about whether an IVA is right for you, consider the following tips.
Your credit rating is given by a company called a credit reference agency. This rating is a measure of how trustworthy you are to lenders, and the higher your credit score, the more reliable you look. However, IVAs remain on your credit history for six years, which can make it difficult to get a loan, get accepted for a mortgage or open a bank account. After you’ve completed your IVA, your credit rating will go back to normal.
While many IPs offer a free initial meeting, there are some who require a fee before they can put forward an IVA proposal. This fee can be lost if your creditors refuse to accept your proposal. And some IPs will only charge you if they start the process. So make sure you check carefully before signing any papers. A professional who is willing to discuss your situation with you can make the process go smoother.
The main difference between an IVA and a secured loan is that a secured loan is more affordable. The security is important for lenders, as it gives them a guarantee that they will recover the loan if you cannot make the repayments. This is why the IVA was introduced in the first place – to make sure a small minority of people would benefit from an IVA. If your situation is unique, however, an IP could propose a variation to your creditors.
If you have multiple types of debt, it is important to choose a secured loan. If your debt is too large for an IVA, you can sell your property to pay for it. Secured loans may also help you sell your home if you can’t afford to continue making your repayments with your current income. This will give you time to sort out your finances and find a new plan. The risks of an IVA are still worth considering if you’re struggling to pay your secured loan.
When choosing an IVA, make sure you know the amount of equity you have in your home. The value of your home must be greater than 85% of its market value. You will also have to take into account any 3rd party interests that you have in your property. In addition, your new mortgage must be affordable and not put you in a worse position than you were in before the IVA. You’ll have a supervisor who will work with you throughout the entire process, starting six months before your final repayments are completed.