Have you received a loan through a finance company, where they assessed your ability to repay the loan, but then once you start making your repayments, you have quickly fallen into arrears? It might be the company did not complete their financial assessment correctly. If any of the following situations apply to you, then contact BSNC to be assigned one of our Financial Mentors to help you renegotiate your loan:
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You have fallen into default within a couple of months of borrowing even though your financial circumstances haven’t changed since taking out the loan.
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Your budget is in deficit, especially if your circumstances haven’t changed.
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The lender refuses to give you their affordability calculation.
Under the Credits & Consumer Finance Act 2003, lenders are obliged to make reasonable enquiries, before lending, to be satisfied that the borrower will be able to repay the loan without suffering substantial hardship.
Michael* wanted to buy a car for his family. He had gone to a finance company and received a loan. The finance company had assessed him as being able to afford the loan. But after a few repayments he started falling into arrears. He was very concerned as he didn’t want to lose the car, but the arrears were starting to mount up and the finance company was on his back. He contacted BSNC to talk to a Financial Mentor to help him sort out his budget.
The Financial Mentor began by asking about the assessment process that the finance company used. She discovered that while both Michael and his wife were working – his wife’s income was infrequent, and there were some weeks that she wasn’t able to get any hours at all. When the finance company assessed their ability to repay the loan, they excluded her income, but incorrectly assumed that she could still pay half the household expenses every week from her income. They attributed half the household expenses to Michael, when the reality was he was actually paying more than half of the total household expenses to make up for the weeks that his wife was not able to contribute.
The finance company had not completed their due diligence correctly. The Financial Mentor was able to take up Michael’s case with them and because they admitted they had made an error, there were grounds to renegotiate the loan conditions. The result was that they were able to get their repayments reduced. The interest which had accrued on the arrears was wiped, and the overall length of the loan was extended to ensure that Michael could repay the loan in a reasonable time. This was a big win for Michael and his family. He was thrilled to be able to keep his car, and to have the situation sorted out.
If you think you might be in a similar situation, then contact BSNC to be assigned a Financial Mentor to help you work through your own budget. Our Financial Mentors are very experienced in dealing with these types of situations. The service is free and totally confidential.
*Name has been changed to protect identity.