If you have massive debts, you may have heard of the ecured loan IVA. However, what is it and how can it help you? Unlike a traditional debt management program, an IVA will not let you foreclose on your property without a 75% approval rate. This is why it is a good choice for many people. Besides, you can pay back the loan early and prevent the stress of trying to collect the money from creditors.
In addition, an IVA can be a good solution for those who have multiple types of debt, unsecured loans, and several creditors. In this case, a secured loan is the best option. If your debt is too big to be paid off with an IVA, you can sell your home to cover the loan. After selling the home, you can use the money from the sale to pay off your debt. This is why it is important to consult a debt management expert before applying for an IVA.
An IVA proposal must be approved by 75% of your creditors ‘by value’. The majority of creditors will vote against it, particularly those who owe the debtor the highest amount. However, if your creditors are not willing to accept the IVA proposal, you can haggle and negotiate the terms of your arrangement. For example, they may want you to borrow more money, include your assets, or make your payments over a longer period of time.
Once you have been accepted for an IVA, your loan supervisor will decide what type of secured loan you should apply for. The amount of equity that you retain in your home can be as much as 85% of its market value. You must also retain at least 15% of the equity that you own. This is why not all lenders offer loans for IVA purposes. Your supervisor will determine what maximum amount a reputable lender will lend you, and how much you can afford to repay.
A secured loan is a debt that is secured against your home. If you fail to pay your debt, your creditors can take your home. Secured loans can be included in an IVA if the creditors agree to be part of the arrangement. The minimum amount that you can include in an IVA is PS10,000, but the fees can be very high. Unless you have a substantial amount of debt, an IVA is not the best choice.
Because an IVA will affect your credit rating, it is important that you seek a specialised lender to help you get the loan that you need. Traditionally, high street lenders will not approve an application for a secured loan based on your IVA. However, specialized lenders offer borrowers with bad credit loans. You can contact them through a lending adviser or lending broker with whole market access. By paying off the loan early, you can release yourself from the restrictions of the IVA and re-establish a good credit score.