Loans for People with IVAs
If you have an IVA or individual voluntary agreement with your creditors to pay
back a certain amount each month through an insolvency practitioner then it will
affect your credit file. In general, if you have an individual voluntary agreement
then you are not allowed to apply for a loan. Although there is some conflicting
information regarding IVAs, the rules do say that during the period of the agreement
you should not have any other credit.
An IVA is an agreement that is designed to help you become debt free, and that is
basically why you cannot apply for other credit during the period of the agreement.
IVAs usually
last for five years and an affordable monthly amount is set for the debtor to make
repayments to their creditors. What the agreement actually does is it stops
all interest on loans and credit cards, which is why you are not allowed to take
on more credit that involves interest payments during the period of the agreement.
You can apply for credit at the end of your IVA, although this will not be easy
to get because the fact that you have had an IVA will be listed on your credit file
and remain there for a period of six years. Unlike bankruptcy, you are allowed to
have a bank account with an IVA but your advisor will probably suggest that you
change your bank and go for a basic bank account that does not allow you any credit.
Although an IVA is a voluntary agreement, it is a formal one when it has been agreed
and therefore there are certain rules that the person has to abide by during the
period of the agreement. Both debtor and creditor are bound by the terms of the
agreement for the specified period. One of the things that the debtor is not allowed
to do during that time is to apply for any further credit, including a loan. No
credit during the agreement period is a fundamental condition of an IVA that you
sign up for when you enter into the agreement. This is a required condition that
pertains to all IVAs and it is meant to protect both the debtor and the creditor
from any further debt during the IVA period.
When you sign an individual voluntary agreement you are, in effect, saying that
you want to be debt free at the end of the five year agreement period. It is very
different from a debt consolidation agreement or from getting a loan to pay off
your existing debts. You cannot take out a loan if you already have an individual
voluntary agreement, which is part of the basis of the deal.
Personal and payday
loans
are available online - fast and hassle-free.