The Ask
A broker came to us with two borrowers who needed £50,000 to clear an existing secured loan and settle an active IVA.
The case was referred to us ahead of formal submission to confirm the income upfront, saving time and avoiding unnecessary requests further down the line for all involved.
Two things ruled out most lenders straight away: an active IVA, and one borrower on maternity leave.
The Challenge
One borrower had been in an IVA since 2021, taken out after unsecured debt became unmanageable. The resulting defaults had left them with a low credit score and no realistic route to a mainstream lender.
The second borrower was on maternity leave, meaning a proportion of maternity pay needed to be used and validated across the loan term rather than a standard income assessment.
The Fix
The IVA had been running since 2021 with no missed payments and no further arrears. On that basis, we were comfortable placing them on our Prestige 1 product at 8.95%. Defaults sitting within the IVA were discounted from affordability, as they were already covered by the IVA payment, which meant the borrowers could access the full loan amount.
For the maternity leave, we asked for an employers letter confirming the payment schedule. That gave us what we needed to use a proportion of the income for affordability, adjusted for childcare costs.
As the broker had referred the case upfront, we were able to make our decision quickly. The completion timeframe was largely driven by the IVA provider being required to convene a creditors’ meeting to agree a redemption figure – a necessary step before the case could complete.
The Benefit
The borrowers’ credit history could easily have closed the door here. Instead, we looked at how they had conducted themselves since the IVA began: four years of consistent payments with no further arrears, and that was enough to place them on our Prestige range and deliver the full £50,000 secured loan they needed.
With the secured loan in place, the existing secured debt and the IVA were both cleared in full. This reduced their monthly outgoings and, more importantly, gave them a clean slate. With the IVA behind them, they can now start rebuilding their credit profile and, in time, approach high street lenders on their own terms.
If you want to sense- check a case, get in touch with the secured loans team today – we’re ready when you are.
