Your IVA may have seemed suitable to you when it first started out but there’s a chance that during the course of it, you may have started to have doubts about it. In that case, one of the options you have is to opt for an IVA early settlement loan. This loan would be used to pay your creditors a large lump sum of money that you owe to them. As a result of this, your IVA would be considered complete and you would not have to make any more monthly IVA payments.
While this type of loan is definitely something that has worked out well for a lot of people, there are certainly some things that you should consider:
- Although you’ll be able to pay off your IVA early, you must keep in mind that the mention of the IVA will still remain in your credit file for six years after your IVA commenced. Hence, while you will be free of your monthly IVA payments, your credit file will still have a blemish in the form of the mention of the IVA for six years since the start of your IVA.
- The mention of your IVA in your credit file will mean that you’ll still have trouble securing credit even after your IVA has ended completely.
- You will still have to pay back your early settlement loan that you took out to complete your IVA early.
Once you’ve decided to end your IVA early, you’ll have to contact your IP and discuss your situation with them. If they feel that your request is reasonable and justified, they will contact your creditors with your proposal. You’ll have to be clear and transparent in your proposal about where the money is coming from so your creditors can be assured that they are getting it from a legitimate source. Just like the original proposal, 75% of your creditors will have to agree to it for it to pass.
There are several companies such as Sprout Loans that offer IVA early settlement loans. You can get in contact with them once you’ve gained permission from your IP and creditors to get it set up. Keep in mind that these companies also have criteria that you need to achieve in order to be eligible for their loans. Some examples of these criteria are:
- Your IVA has to have been running for a certain amount of time. Normally, this time period is 30 months.
- You’ve missed only a certain amount of your IVA payments. Normally this is two or less.
- You have no current arrears.