My brother took out a personal revolving line of credit several years ago with Household bank (he was a struggling law student and badly needed the money). He took out $7,500, and has paid just over $6,000 to date, yet has a $10,150 balance @22%. He called them earlier to see what can be done to get this settled and he was given two options: 1. They are willing to settle the debt for $6,100. Now, since he doesn't have that kind of money around, he'd need to somehow finance that. However, they said that once it is settled, there would be a notation on his credit report saying something to the effect of "settled for less". First of all, does that sound about right? and if so, how does "settled for less" look on someone's credit? 2. Convert the loan to an installment loan at 18% and that's the lowest rate the will offer. So can someone please advise on what deal is the best deal? Also, is there any room for negotiation in any of these cases? Either reducing the settlement even further or getting an even lower rate? Thanks a lot in advance!
Are there fees on top of the installment loan? Can he borrow at lower than 18%? What are his current FICO scores?
I'll have to find out from him for sure. But I'll assume now that yes, there must have been fees involved in this. My reasoning is that given his financial situation, he may have missed payments here and there. I'll check with him to be sure. I don't know his fico scores, but I know they're not very good. So I do not believe anyone would finance him lower than 18%. He also has 2 unpaid collections on his credit. I've advised him to go the route of a pay-for-deletion since they're both small amounts and see if it works.
