Shawbrook Bank is launching a secured loan aimed at helping borrowers escape individual voluntary arrangement contracts.
Rates on the product start from 11.9 per cent up to 80 per cent LTV and it will be made available through the Select Partnership.
An IVA contract represents an alternative to declaring bankruptcy for borrowers in financial hardship. The standard term on an IVA contract is five years, at which point, the customer is required to release equity to repay the remaining debt up to a maximum LTV of 85 per cent.
The firm says pre-credit crunch high-street lenders were happy to lend the customer the money to release themselves from the IVA.
But in today’s market the traditional method of a remortgage is no longer viable for customers as ultimately it would mean incurring a higher rate, so the IVA secured loan product allows the customers existing mortgage to remain in place.
Shawbrook’s IVA secured loan product works just like the firm’s other secured loan products, with the only difference that the purpose of the loan must be for full and final settlement of the IVA and the customer must have maintained all their contractual payments.
Shawbrook Bank secured loans sales manager Maeve Ward says: “This market is under serviced – we understand that ex-IVA customers are not a risk and provide a history of regular payments.
“We work closely with our partners to identify the needs of the customer and in this instance The Select Partnerships managing director Shaun Vickery approached us with a need for an IVA product that he strongly felt was missing in the market.”