25 May 2023
IVA, short for Individual Voluntary Arrangement, is a formal agreement between an individual and their creditors to repay their debts over a fixed period, usually five to six years. It is a legally binding agreement supervised by an insolvency practitioner. An IVA allows the individual to make affordable monthly payments based on their income and expenses, and it often involves writing off a portion of the outstanding debt.
Understanding the concept of an IVA is important when considering car finance options, especially for individuals who have experienced financial difficulties and are working towards resolving their debts. If someone is currently in an IVA, it may impact their ability to obtain car finance, as lenders may perceive it as a risk factor. However, it's essential to consult with an insolvency practitioner or financial advisor to explore available options and discuss any potential implications on obtaining car finance.
Suppose an individual is in an ongoing IVA to manage their debts. They wish to obtain car finance to purchase a vehicle. In this case, the individual's ability to secure car finance may be affected by the IVA. Lenders may view the IVA as a factor that increases their credit risk. However, every situation is unique, and it's advisable for individuals in an IVA to seek guidance from a financial advisor or specialist car finance provider who can provide tailored advice based on their circumstances.
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