IVA Loans are one of the most popular means of debt relief in the UK and Ireland, used by hundreds of thousands of people. In this article, we’ll look at everything you need to know about IVA loans, including how they work, how to apply and what happens if you want to make changes to your plan after it’s been put in place. We’ll even include a free link where you can get matched with the best IVA company so that you can finally put your financial worries behind you!
What are IVAs?
IVAs are an unsecured debt-management tool that many turn to when they can’t keep up with their monthly bills. They’re meant to be a solution for people with multiple debts, such as credit cards and loans, who can make monthly payments but want help getting all of their monthly obligations under control. IVAs help individuals by reducing what they owe on their debts over time by lowering interest rates and even cancelling interest altogether. But it isn’t necessarily easy—or cheap—to get out of debt, since applying for an IVA involves several fees and paperwork. To better understand how IVAs work and if you should apply for an IVA, Monemyst can be your best guide.
Who can benefit from an IVA?
IVAs are designed to help individuals and businesses with overwhelming debts. If you’re struggling with debt, an IVA might be able to give you a fresh start. In fact, in some cases, an IVA can help you avoid bankruptcy. However, there are several requirements for applying for an IVA. Before making any decision about IVAs or bankruptcy, it’s worth discussing with your creditors and financial adviser first.
How much does it cost?
IVAs are one of only a few ways that individuals with debts can apply for insolvency. This does not come at a cheap price, and so you will be charged a fee for applying for an IVA. In England and Wales, you’ll have to pay £90 (or just over $100), but if you’re in Scotland or Northern Ireland, it’s £180 ($210). In addition, most IVAs also come with monthly fees for running costs.
What do I have to pay?
As such, IVAs come with several payments that must be made for them to remain active. Any payments will depend on your unique IVA, but most have you making regular and consistent instalments for a while. The amount for each payment is calculated using your current income and debt repayment ability. The higher you score on these two measures, which are taken into account in the application, then the lower your monthly payments will be. During an IVA period, there will also be some other fees that may apply depending on whether you have any loans or not. If you have secured loans these need to be paid off first through certain deductions from each monthly instalment.
How long will my payments last?
The length of time you make payments varies depending on how much you owe. Once your payments have helped bring your debt down to £0, any remaining debt is cancelled. This leaves you with a clean slate and no more monthly payments. If you owe less than £20,000, your monthly payment is usually between 4% and 12% of your income, depending on which repayment plan you choose.
When should I consider an IVA?
An IVA can help you deal with an overwhelming amount of debt when you have no other option. If you do have a choice and are not facing immediate eviction or repossession, it is probably better to negotiate your way out of some or all of your debts. If you are struggling with large amounts of money owed on credit cards and loans, then consider an IVA as an alternative to bankruptcy.
