Working out a repayment plan

If you are under financial pressure due to the payments made towards your mortgage payments or arrears, then you should contact your mortgage lender. They have experience with similar situations and are typically helpful.

 

What are Repayment Plans?

Repayment plans are formal arrangements you make with a bank or another lender to pay back a loan. The following structure can act as a guide for setting out such a plan and in what order you should pay any of your debts.

 

Priority Outgoings

When calculating a plan, you should focus on the most important outgoings first, these will typically include:

• Mortgage;
• Gas and Electricity;
• Council Tax;
• Court fines;
• Food; and
• Medical expenses.

 

Non-priority outgoings

You may be liable for non-priority debts, essentially those that do not threaten your home (unsecured), these will usually include:

• Credit cards;
• Payday loans and unsecured personal loans;
• Store card or catalogue debts; and
• Overdrafts

These are given less priority as they will not result in more serious consequences, such as losing your home or access to basic utilities. However, you are often legally obligated to pay off all your debts, regardless of importance.

 

How to set up your repayment plan

1. Make a list of all your debts - this should include every debt you have, the minimum payment amount (the least you are legally obligated to pay for this debt).
2. Following the structure given above, list your debts from the highest interest rate to the lowest interest rate in each category.
3. Begin budgeting your income - set aside amounts for priority debts immediately, and money for you to live on (this may take some trial and error) and cut down where you can by asking to pay less for non-priority debts. Finally, assign money towards repaying non-priority debts.
4. If funds allow start by repaying the highest interest loan debt in each non-priority category, and pay the minimum amount for everything else.
5. Once you have paid off your first debt, move on to the next one, and continue to pay the minimum amount for each remaining debt.
6. Once your debts have been paid off (or to an extent where you are comfortable having some extra money), you should then set up the extra budget towards a savings account for emergencies or future debt. This will ensure that your accounts will remain in the black for a longer period.

 

How we can help

We work with several excellent third-party independent financial advisors who can look at the market for you to try and get you a better deal, unlike some debt management companies (and charities) we do not ask you to send us the money and then pass it on (after taking a fee), solutions may include: -

• Checking if there are benefits you are entitled to but not claiming;
• Working out an affordable repayment plan with some/all of your creditors;
• Renegotiating a short-term reduction in interest rates;
• Arrange an extension to your mortgage term to lower your monthly payments (remember you can always pay in a bit extra if you want).
• Remortgage with an alternative lender.

 

As stated previously we are not experts in this field and the advisor may well have other suggestions available.

Please note we make no commission from these referrals but do need clients to open a case so that we can prepare a financial brief for them. To gain our assistance you need to open a case, this is done by taking advantage of our free consultation service, activated by the link at the top of the page, should you wish to start a case the caseworker will send you the suitable payment link.

Please note your caseworker can only give generic advice, their role is to prepare your details for handling by our appointed financial advisor and to act as your point of contact, they will also issue you with your Password and PIN, these will be needed to log onto your client dashboard. From your dashboard you will be able to manage and view every aspect of your case, upload documents, images, files etc.