Could I get a 'haircut'?

castrolracing

I had a small business which I wound up just over a year ago. I had and still have 2 small(ish) loans in connection with the business. One is with my local credit union. It was a personal loan with no security. I am paying it back more or less whenever I have some spare cash. The second loan is with Ulster Bank and has some land as security towards it. I am paying that one off with monthly repayments. I now have a bit of cash saved up, it's almost enough to cover one loan, either the bank one or the credit union one. I asked my credit union manager last time we spoke if he cud get me any reduction on the amount I owe, he said it wasn't possible, that he wasnt allowed to do that. I'm just curious to know though if anyone has tried successfully to get the balance on a loan, either from credit union or bank reduced in anyway. I realise that because I have the security with the bank that they are unlikely to agree to any deal or 'haircut' as we hear so much about with bond holders. However I think it's probably worth a shot at making an offer to to them. Say for example I owe 10k, if I offer 9k now, would they accept to and write off the remaining 1k?

Is this wishful thinking?

Any thoughts?

Scortho

castrolracing wrote: »

I had a small business which I wound up just over a year ago. I had and still have 2 small(ish) loans in connection with the business. One is with my local credit union. It was a personal loan with no security. I am paying it back more or less whenever I have some spare cash. The second loan is with Ulster Bank and has some land as security towards it. I am paying that one off with monthly repayments. I now have a bit of cash saved up, it's almost enough to cover one loan, either the bank one or the credit union one. I asked my credit union manager last time we spoke if he cud get me any reduction on the amount I owe, he said it wasn't possible, that he wasnt allowed to do that. I'm just curious to know though if anyone has tried successfully to get the balance on a loan, either from credit union or bank reduced in anyway. I realise that because I have the security with the bank that they are unlikely to agree to any deal or 'haircut' as we hear so much about with bond holders. However I think it's probably worth a shot at making an offer to to them. Say for example I owe 10k, if I offer 9k now, would they accept to and write off the remaining 1k?

Is this wishful thinking?

Any thoughts?

Best thing to do is offer it and see what happens. What's the worst they'll say? No.
At least then you'll have tried instead of wondering about it. I'd stick to paying the loan back with the most security on it first.

Anyone

Why are you holding on to money if you can clear one of the loans? Doesnt make sense to me. You're probably paying 10% on the loans, and earning nothing on the savings. Clear one loan, and pay the other off quicker. The amount of interest you will save is the equivalent of the "haircut" you want.

castrolracing

Anyone wrote: »

Why are you holding on to money if you can clear one of the loans? Doesnt make sense to me. You're probably paying 10% on the loans, and earning nothing on the savings. Clear one loan, and pay the other off quicker. The amount of interest you will save is the equivalent of the "haircut" you want.

I've only recently saved the money. I'm know what u mean and you're right. Just that I'm abroad working ATM and its not cost effective to transfer small amounts of money. It's cheaper to save up and send one 'lump'.

homer911

What you are talking about is borderline "moral hazard". You have a legal and moral responsibility to repay your debts. As you clearly have the capacity to do so, you absolutely should.