Is my car finance eligible?

Can I repay my car finance through my Debt Management Plan?

Car finance can take several forms, ranging from a personal loan from your bank to Hire Purchase, Personal Contract Plans, or leasing. It is important to understand which type of finance has been taken out to consider the impact of failing to meet the monthly payments required by the original agreement.

Hire Purchase, Personal Contract Plans and leasing are all secured by the car itself, and sometimes lenders require a third party (usually a parent) to provide a personal guarantee which enables them to claim the payments off the third party if the original borrower does not keep up with the commitments.

Each of these types of finance will be treated as Priority Debts when our team of advisers at National Money are discussing your financial circumstances with you. As Priority Debts which need to be paid so that you do not risk losing the use of the car, we will build the monthly payments into your budget as part of your essential living costs before we reach a figure you can reasonably afford to set aside for dealing with your unsecured debts which will then be incorporated into your Debt Management Plan.

If you are unsure whether your car finance is Hire Purchase etc, you should check your original Credit Agreement, which will usually set out the basis of the finance. The document will normally record the details of the vehicle and registration number.

If the car finance is through a personal loan from the bank or other lender, this will be an unsecured loan unless otherwise stated. In such circumstances, the debt can be included in the Debt Management Plan, as a Non Priority debt, because a variation of the loan payment will not trigger repossession of the car.

To discuss your situation further, please contact the National Money team of experts on 08448 247 260

Or ask us any Debt Management questions using the form below: