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Topic # 228571 12-Jan-2018 11:48
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Hi. 

 

So my nephew seems to have gotten himself into a pickle with borrowing more than he should of as quite a few young people do these days. 

 

He called a few banks at my suggestion for a Debt Consolidation loan, and was pretty much declined on the spot due to "High number of enquiries" and having been behind on payments for his phone bill and has not been in his job 6 months. 

 

1) Yes, I can understand this concern, however, this is something that has been addressed going forward as part of him understanding the situation he is in. 

 

2) Was true 8 months ago, has been sorted and is up to date for past 3 months as best I can understand it. As part of a payment arrangement, he made with his provider. 

 

3) He has been continuously employed for 18 months, and switched jobs recently to take a higher paid position with another company.

 

Generally, Debt Consolidation loans are to help people get out of a pickle and yet the things they are saying, are symptomatic of that very issue. 

 

Does anyone have any recommendations on how to proceed? The ASB Calculator says he could pay back the debt within 2 years at $190 a fortnight, and he believes he could easily pay it back in 18 months. 

 

He has some loans at some crazy rates, which will likely cripple him without finding a way to pay them off. 

 

I had thought there were a few banking representatives at GZ but I can't seem to find them to tag in to see if someone more senior might look at the situation further. 

 

 

 

 


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163 posts

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  Reply # 1937613 12-Jan-2018 11:52
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I would try Squirrel Money or Harmoney - both peer to peer lenders:

 

https://www.squirrelmoney.co.nz/

 

https://www.harmoney.co.nz/

 

Both will offer interest rates based on credit history, reason for loan etc.


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  Reply # 1937625 12-Jan-2018 12:10
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CAP will actually work directly with him to work out his best options, no fees or commissions or interest.

They insist on total clarity and then guide him through a short (about 6-8 hours over a few weeks) budgeting course to tech him how to STAY debt free once he reaches that goal too.

http://www.capnz.org

 
 
 
 


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  Reply # 1937630 12-Jan-2018 12:19
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PhantomNVD: CAP will actually work directly with him to work out his best options, no fees or commissions or interest.

They insist on total clarity and then guide him through a short (about 6-8 hours over a few weeks) budgeting course to tech him how to STAY debt free once he reaches that goal too.

http://www.capnz.org

 

Thats a good idea, to attack the cause, rather than find a solution to fix today's result. 

 

Or.

 

If the nephew can work out where to place his left over wages, in an effort to increase cashflow by focussing on a debt that is sooner to clear, then focus on the next to clear debt, with the extra funds from the now cleared first debt. Needless to say, there would need to be contact with the creditors to explain his situation. If he calls them before they call him, you can often get a lot of leeway, as they can see an effort is being made.


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  Reply # 1937652 12-Jan-2018 12:55
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Since you are the perfect Uncle, you could act as guarantor for him with one of the main banks.


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  Reply # 1937654 12-Jan-2018 13:00
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Banks won't look at him for the reason you said above, finance companies and brokers might be able to do something but most are not much better than banks when it comes to lending money.  Harmoney might be your best bet.

 

 


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  Reply # 1937656 12-Jan-2018 13:01
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NEVER ever be a guarantor to anyone.

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  Reply # 1937660 12-Jan-2018 13:05
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Can he actually service the current loans on his income? Has he got any wiggle room, ie, move back home to drop rent etc?

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  Reply # 1937667 12-Jan-2018 13:12
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Pumpedd:

 

Since you are the perfect Uncle, you could act as guarantor for him with one of the main banks.

 

 

That is a bit mean IMHO.




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  Reply # 1937668 12-Jan-2018 13:14
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mudguard: Can he actually service the current loans on his income? Has he got any wiggle room, ie, move back home to drop rent etc?

 

The interest is the issue, he has too many loans. Debt is 10K excluding his car, which is about another 10. 

 

He is at home, and he actually has a reasonable disposable income (About $250 a week to service debt) , but it's all piling in on top with a few other items still to come like he immediately needs new tyres which are on steel right now. Needs the car for work. 

 

It can be managed but with a lot of pain and hassle from the debt collectors etc. 

 

 


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  Reply # 1937675 12-Jan-2018 13:30
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networkn:

mudguard: Can he actually service the current loans on his income? Has he got any wiggle room, ie, move back home to drop rent etc?


The interest is the issue, he has too many loans. Debt is 10K excluding his car, which is about another 10. 


He is at home, and he actually has a reasonable disposable income (About $250 a week to service debt) , but it's all piling in on top with a few other items still to come like he immediately needs new tyres which are on steel right now. Needs the car for work. 


It can be managed but with a lot of pain and hassle from the debt collectors etc. 


 


Ring CAP and see what they can offer, I’m pretty sure they have a way out for people in exactly this position, and possibly even very low, or ‘interest free’ as it’s an outreach/ministry and their goal is to teach people how to get out from under the debt, not just pay it off now.

0508 227 111
Perhaps as the informed and helpful uncle you could ring up yourself and evaluate what they are offering for him?

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  Reply # 1937686 12-Jan-2018 13:48
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networkn: The ASB Calculator says he could pay back the debt within 2 years at $190 a fortnight.

 

networkn: Debt is 10K excluding his car, which is about another 10.

 

How on earth could he pay back 20K over 2 years at only $190 a fortnight?




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  Reply # 1937698 12-Jan-2018 14:03
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Paul1977:

 

networkn: The ASB Calculator says he could pay back the debt within 2 years at $190 a fortnight.

 

networkn: Debt is 10K excluding his car, which is about another 10.

 

How on earth could he pay back 20K over 2 years at only $190 a fortnight?

 

 

Sorry, that's debt excluding the car, and debt rounded up slightly. The car is a loan he can manage he we can sort the remainder of his other debt. 

 

 

 

 

 

 




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  Reply # 1937699 12-Jan-2018 14:04
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tdgeek:

 

Pumpedd:

 

Since you are the perfect Uncle, you could act as guarantor for him with one of the main banks.

 

 

That is a bit mean IMHO.

 

 

I am not going to guarantor the debt


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  Reply # 1937700 12-Jan-2018 14:05
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On one hand you say he has disposable income, but on the on the other you say there are debt collectors etc,

 

Does he have any spare cash now?

 

One of the big problems will be getting out of the contracts for the high interest loans, the break fees are usually pretty steep, ( basically to deter you from paying things back quickly)


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  Reply # 1937701 12-Jan-2018 14:05
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$190 a fortnight over two years is 9880.  Which is close to $10K, ignoring interest.

 

If I understand networkn the car finance is probably "reasonable" interest while the 10K debt is "unreasonable".  Credit cards?  Finance companies?  Loan sharks?

 

So I take it the aim is looking for $10K debt consolidation to repay the "unreasonable" interest debt, and pay it off the same time as the Car loan. 

 

However that extra $10K owing on the car would be relevant in getting a consolidation loan I'm sure.

 

 

 

Just wondering:  What sort of interest rate would be deemed "reasonable"?  Even the peer to peer lenders would be up at the 10-15% interest rate I'm sure.


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