Getting a Loan After IVA: Eligibility, Process, & What To Expect

Stop Debt Collectors Getting a Loan After IVA: Eligibility, Process, & What To Expect

Getting a Loan After IVA: Eligibility, Process, & What To Expect

One of the prudent ways of addressing your debts is to opt for an Individual Voluntary Arrangement (IVA). However, an IVA can impact your life in ways you may not know beforehand. The reason is that most individuals focus on the effects of an IVA when they already have it.

That suggests that you also need to consider the implications of an IVA once you finish the same. Additionally, if you need help checking whether your debt collector is compliant with debt collection laws, DoNotPay becomes the ideal go-to solution.

What Is an IVA?

The simplest definition of an IVA is a legal agreement between yourself and those you owe money to. The arrangement allows you to repay your debts over an agreed period, usually between five to six years. An IVA will come in handy when repaying the following debts.

  1. The money you owe HMRC.
  2. Bank overdrafts.
  3. Hire purchase debts.
  4. Personal loans.
  5. Council tax arrears.
  6. Store cards and credit cards.

An insolvency practitioner is a legal professional responsible for arranging an IVA. Opting for an IVA means that you will agree to a payment plan with your creditors. The factors of consideration, in this case, will include the amount you can repay at a time and your current situation.

So, if you need insight into when your debt will be repaid and to avoid sinking deeper into debt due to increased interest, going for an IVA will be wise. Note that you will only be free from the commitments to your creditors once an IVA agreement ends.

Another thing worth mentioning is that an IVA causes your credit score to decline and will feature in your credit file. As much as that is the case, an IVA curbs the accumulation of interest by freezing your debts, which, in turn, helps you make manageable repayments.

Improving Your Credit Rating After an IVA

Sometimes, engaging a bad credit lender may seem the best option if one needs a loan within the shortest time possible, which is quite unfortunate. On the contrary, waiting will be worth it if you can afford to do so.

For instance, if you wait 12 months, the mention of your IVA will be off your credit file, which will allow you to secure conventional loans. Note that when mentioned in your credit file, an IVA negatively impacts your credit score.

That explains why you should apply for loans once an IVA ceases to be part of your credit report. Here are some of the actions you can take to improve your credit score after an IVA.

Assess Your Financial Links to Other IndividualsFirst, understand that anyone you share an account with will feature in your credit report. So, being linked to someone with poor credit can bring your score down. Credit cards and joint bank accounts are some examples of shared accounts.

In that case, removing yourself from a shared account if you don't need it is advisable.

Review Your Credit Report OftenIf you want to improve your credit rating after an IVA, checking your credit report regularly and taking note of anything new becomes paramount. The reason is that errors are inevitable at times, and knowing where you are at with your debt is also critical.

That is achievable by assessing your basic personal details for old data or mistakes, and you can also ask the firm that billed you incorrectly to put it right.

Avoid Applying for Too Much Credit At OnceSteering clear from the temptation to make multiple credit applications within a short period is a wise idea. That is the case since lenders carry out a "hard search" on your credit history once you apply for credit. After that, those details become part of your report for a year.

Having several hard searches is a signal to lenders that managing your cash is a problem and the reason behind trying to get a lot of credit. The bottom line is that making multiple applications will negatively impact your ability to access credit.

Getting Debt Help Through DoNotPay

Debt collectors can harass you for months if you are late or cannot repay your loan for various reasons. The best part is that visiting can take care of such situations by helping you discover the assistance DoNotPay offers.

Going for this option will also make your work easy because it only involves a few simple steps, as per the details below.

  1. Search “debt collection” on DoNotPay.

     

  2. Answer a series of questions about the debt collectors, including when you were contacted and how you were contacted, so we can determine if they have violated any debt collection laws.

     

  3. Decide which course of action you want to take based on our guidance, such as filing a debt verification request, demanding for the collectors to stop contacting you, or reporting them to a professional trade association.

     

DoNotPay can also teach how to get debt assistance with other services, such as:

More DoNotPay Applications

Although winning a loan approval after an IVA is much tougher than it sounds, most people do not think about its implications. If you are in a fix, check to find out how DoNotPay can help you with your debt after an IVA.

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