New answers tagged

2

In general, no. The loan was made to you and you are responsible for repaying the loan. The only concern for the bank would be if you pledged the business as collateral for the loan. In that case, they might demand new collateral... though that is rare since the bank is unlikely to know how the business is doing.


0

You should evaluate you monthly expenses if you were to loose your job with no emergency fund. Could you pick up the slack with another non-career job if you had to? How confidant are you about getting a career job in your field right now if you had to? You should also keep in mind that being junior doesn't necessarily make you a target for a layoff, in fact ...


1

Salient details to your situation: Based on your currency use you are using you are based in the UK You rent, in the centre of the city, so your rent is "quite high" You don't own a car, and most things you need are within walking distance There are a few more things to take into account: Under normal circumstances in the UK, if you are made ...


0

If you want to keep a reserve of cash and to be able to overpay from hereon in as suggested by @penelope, then, you could take out a different loan on much better terms and use that to pay off the Career Development loan with the exhorbitant 9.9%. By doing this, as recommended by Martin Lewis, you could save several hundred pounds in interest over the ...


0

This comes down to whether you'd be able to reinstate your loan, or get a new loan, in the event of an emergency. If getting a new loan in the event of an emergency is not an option, then absolutely, you'll need some emergency funds. Figure out how much you actually need, and pay the rest into the loan. If you know you'll easily be able to get a new loan, ...


5

Can you refinance? As others have said, you're on a high interest rate. If you've still got a job and a sympathetic bank you should be able to work out a new loan at a better rate. If you can consolidate a few other things as well, such as a credit card, you'll do well.


0

I'm guilty of posting a comment as an answer, so: TEN percent interest? Pay it off today. With the 250- a month you'll have saved a NEW three thousand in just a year. You're young, there's little/no need for an emergency fund. Something tells me this is software industry. If so, if you do get laid off, if you can't find a new contract (as a junior) in ...


1

Based on your statements, you have a combined credit card debt of 9K. You indicate you can afford to pay 0.5K/month. You indicate the "markup" (presumably, the interest) is 30% per month, meaning you have to pay 2.7K/month in interest alone. If so, you are bankrupt. You should try to earn more money, cut your other expenses, or negotiate a payment ...


0

Go to each bank and explain your situation. Ask them to help you. You're no good to them if you go into defaults and are unable to pay. It's in their best interests to help you. It's possible in many banks to get a bond with lower interest rates which is used to pay down the credit cards. I wouldn't expect to get this, but ask. It's quite common where I'm ...


2

I do not know how much 120K PKR means and how does this translates into the cost of living, so bear with me if some of my points seem to be too harsh. The standard answer is that you pay first the debt with the highest interest rate. This means that as you pay more and more the cost of your interests goes down as much as possible for the buck. To this rule ...


1

Do not make any additional debt. You have a serious financial problem now that is you cannot manage your money. With income of 120k you should be able to pay 15k debt each month. You have to list down your expense and cut unnecessary expense. Use that money to pay credit card. Wait. Is that 120k a yearly income or a monthly income?


2

It is better to have a healthy amount of savings than no debt. Let's suppose you paid off that loan right now, but something bad happened tomorrow that required you to spend £1000. Instead of being able to pull that money out of savings, you would have to take out a personal loan (or put it on a credit card) at a higher interest rate than the existing loan ...


9

"Emergency funds aren't important", eh? Let's try that on for size. Emergency funds were all the rage during the 2008-09 recession. Suze Orman, for instance, wouldn't shut up about them. In fact, she upgraded them from "3-6 month" to "6-8 month". She's probably right; millions would have had an easier time weathering that ...


43

What nobody else mentioned yet is what you could do from now on. If you consider your current savings enough of an emergency fund, you can look into regularly overpaying your loan from now on. How much you keep in an emergency fund is your own personal choice. Typical advice is 3-6 months full expenses (rent/mortgage, bills and necessities such as food), ...


-3

You do not, never ever, touch your emergency funds. 6 months full costs is the minimum you have to have - crap hits the fan. sometimes, and you may be left with unexpected costs. Even if you are not let go, some emergency of some kind may require you to dig into reserves. This is not about money - this is about safety. And you seriously said that you may be ...


0

In my opinion this comes down to a math problem. How much are your bills and how long will it be until you can find a job if you lost your today? How much income would you have in the interim through unemployment insurance (or whatever they call it in your locale)? That should give you a number. Keep that amount in savings, maybe 10% more, and use the ...


34

It sounds like you have some very real income risk, so I would not drain my savings completely just to get rid of the loan. I don't know how long £5000 would last you if you lost your job, or how long it would take to find a new job (even one way below your skills) to know how long the fund needs to last, but you could use some of it just to reduce the ...


0

The important thing to understand about debt and interest rates is that for repayment prioritization (when the goal is paying the least interest) the balance doesn't matter. It may be beneficial to think of many $1 loans instead of a few larger ones. Having one $100,000 loan at 4% is the same from an interest perspective as having 100,000 $1 loans at 4%. ...


1

Cash in (with interest accrued) balanced against cash at end of year 10 1750000 (1 + r)^9 + 1750000 (1 + r)^8 = 247733109 ∴ r = 0.644646


2

No, you are incorrect in your reasoning. As you pay down a loan, you reduce the interest you will pay in the future. For simplicity's sake, let's assume you have two debts: A credit card debt of $30,000 which is charged 20% interest per year A mortgage loan of $300,000 which has 3% interest per year. To keep our example simple, we'll assume that you make ...


1

The wisdom that you have "frequently seen written" is in fact correct. You must pay off at least the minimum required amount on each of your loans and credit cards. If you have further surplus cash available to pay down your debts, your best option is indeed to pay off the loan with the highest interest rate. If one loan is accruing more interest ...


2

Is this for a home loan in the United States? In the US, ever since the Dodd-Frank act, lenders are required to verify "ability to repay" if the loan is to meet the requirements to be a qualified mortgage. If a loan meets the ability to repay and other requirements as a qualified mortgage it receives some specific protections from liability ...


0

It varies from bank to bank. Some lenders would ask for proof for income and some won't. Apart from income proof, there are other such criteria a bank may consider such as your credit report, credit score, debt to income ratio, repayment history, etc.


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