Originally posted by fedupwiththeworry
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Most lenders like to see a six month ATP (Arrangement To Pay) being honoured before they'll consider capitalization. So if you can get this £26 accepted and if you can stick to it then I think you should ask them to add the arrears to the loan after six payments have successfully gone through.
The only down side of that is your monthly payment will increase because when arrears are added to the loan they will start to attract interest on them since they will be "capital borrowed" and not "arrears owed" where interest is not charged.
If you can tidy up your file by getting shot of the extinct SPO and perform well for six months then you'll stand a good chance of capitalization because it'll be over five years since they last did this.
If they do agree to your £26 per month offer then I'd be inclined to pay them £27 (if you can manage that) so you can honestly say that you have overpaid your agreement. That always looks good.
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