Individual Voluntary Agreement, or IVA, is a formal and legally binding settlement process between you and your creditors that allows you to pay your obligations over a predetermined period of time. This means the court has approved it, and your lender has to comply.
What is an iva loan? Apply for IVA loan
An Individual Voluntary Arrangement (IVA) is a contract between you and your creditors that allows you to pay all or part of your iva loan. You agree to pay the monthly to an insolvent company, who will split the funds among your creditors. An IVA, instead of bankruptcy, provide the you more control on your home.
The Money Advice Service has a list of organizations that can provide you with free iva advice on whether an IVA is a good option for you.
To get an IVA, contact an insolvency practitioner. Your insolvency practitioner decides how much you can pay and how long the IVA will stay. You will be required to make a report about your financial condition, such as your assets, debts, income, and creditors. Your creditors will be called by your insolvency practitioner.
Can I get a loan on IVA?
During your IVA, you can take out iva loans. but you can’t steal more than £500 without approval from the Bankruptcy Practitioner (IP) who is overseeing your process. If IVAs failed, you will still pay the remaining amount to each of your creditors and will need to set up a new repayment plan.
How Does an IVA Handle Bank Loans?
When a personal bank loan is included in an IVA, the bank is given the opportunity to lodge a claim for the money owing to them by the IVA applicant. The ‘Outstanding balance’ is computed by multiplying the contractual monthly loan payment by the remaining monthly payment under the original agreement.
This value will be different from the ‘Settlement figure’ for a personal loan, which is the amount commonly offered by the bank to bring a loan to an early settlement via a lump sum payment.
The lender will, understandably, prefer to collect the unpaid sum through an IVA because it is typically much more than the settlement figure. This entails.
However, this has only a minor influence on the IVA client, as the higher debt would only result in a minor rise in the IVA contribution. In general, high street banks recognize that a tiny portion of their client base will face financial difficulties, and when this comes, they will, in most situations, take a realistic approach and seek an amicable settlement, such as an IVA.
What are the Consequences of an IVA Loan?
Individual Voluntary Arrangements (IVAs) can have a severe impact on both your careers, as well as your credit rating. But, if managed correctly, an IVA can assist you in taking control of your money. You can improve your financial condition in the long run by keeping to the provisions of your IVA debt and taking steps to improve your credit file.
How difficult would it be to obtain a loan once my IVA is completed?
It’s worth noting that an IVA stays on your credit file for six years after it’s started. Thus, if your IVA is completed within 5 years, the IVA will remain on your credit history for another year, making it extremely difficult for you to obtain credit during that time. Even if you do get one, it will almost certainly come with a high interest rate.
We recommend that you wait until your IVA has been removed from your credit file before applying for a loan (unless it is absolutely required). This is because seeking a loan will not only be stressful, but it will also have a negative influence on your credit score.
If you’re experiencing problems getting a loan, you can try contacting an impartial debt charity like Pay plan for assistance. They may be able to connect you with lenders you were previously unaware of.
The Bottom Line
Now, you are well aware that an IVA loan can be the best option for you or not. To get the best loan advice, get in touch with reliable and friendly advisors and discuss what loan solutions may be available to you.
To read more about IVA loans and how to apply for one, call the National Debt Helpline at 03338803165.