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  • FIRST POST
    • Bluezulu
    • By Bluezulu 13th Mar 17, 10:36 AM
    • 4Posts
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    Bluezulu
    Interest on a credit card
    • #1
    • 13th Mar 17, 10:36 AM
    Interest on a credit card 13th Mar 17 at 10:36 AM
    Hi everyone

    Need some help. A friend loaned me £2600 off his credit card. I've since paid that back. But now he is telling me there is still £1200 interest still outstanding. I loaned the money in September and paid the £2600 off his card in February.

    Could anyone help and advise if the interest amount is correct. I have no qualms about paying it. It just seems a bit high

    Regards

    Rob
Page 1
    • zx81
    • By zx81 13th Mar 17, 10:40 AM
    • 14,046 Posts
    • 14,738 Thanks
    zx81
    • #2
    • 13th Mar 17, 10:40 AM
    • #2
    • 13th Mar 17, 10:40 AM
    A friend loaned me £2600 off his credit card. I've since paid that back. But now he is telling me there is still £1200 interest still outstanding. I loaned the money in September and paid the £2600 off his card in February.
    Originally posted by Bluezulu

    He lent to you and then you lent it back to him? Or to someone else?


    Regardless, he'll need a fairly high APR for that sort of interest. Though there will also have been cash fees.


    Why not ask him for the detail?
    • mrmagooooooo
    • By mrmagooooooo 13th Mar 17, 10:50 AM
    • 93 Posts
    • 66 Thanks
    mrmagooooooo
    • #3
    • 13th Mar 17, 10:50 AM
    • #3
    • 13th Mar 17, 10:50 AM
    Agreed, Ask him to view the statements from the time the money was loaned.

    You can then do your own calculations

    1200 in Interest in 6 months works out at around 145% APR which is extremely unrealistic.

    Sounds to me like your friend is trying to milk you out of a few quid! :-/
    • jonmoneybags
    • By jonmoneybags 13th Mar 17, 11:01 AM
    • 291 Posts
    • 248 Thanks
    jonmoneybags
    • #4
    • 13th Mar 17, 11:01 AM
    • #4
    • 13th Mar 17, 11:01 AM
    tell him to take a running jump. You borrowed 2600, and paid back 2600. More fool him for getting the money from such a high interest card.
    • bris
    • By bris 13th Mar 17, 12:10 PM
    • 7,030 Posts
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    bris
    • #5
    • 13th Mar 17, 12:10 PM
    • #5
    • 13th Mar 17, 12:10 PM
    tell him to take a running jump. You borrowed 2600, and paid back 2600. More fool him for getting the money from such a high interest card.
    Originally posted by jonmoneybags
    Nonsense, the fair thing to do is to make sure you pay back the cost of the interest, it's not as if the OP didn't know there would be interest.


    £1200 sound very high, get statements from him.
    • MallyGirl
    • By MallyGirl 13th Mar 17, 12:15 PM
    • 2,016 Posts
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    MallyGirl
    • #6
    • 13th Mar 17, 12:15 PM
    • #6
    • 13th Mar 17, 12:15 PM
    If he used to pay off in full and therefore incur no interest then his own transactions may have also generated interest in the period till you paid him back. You might be being hit with that. You should have agreed how you would handle this before you borrowed the money.
    • jonmoneybags
    • By jonmoneybags 13th Mar 17, 12:15 PM
    • 291 Posts
    • 248 Thanks
    jonmoneybags
    • #7
    • 13th Mar 17, 12:15 PM
    • #7
    • 13th Mar 17, 12:15 PM
    Nonsense, the fair thing to do is to make sure you pay back the cost of the interest, it's not as if the OP didn't know there would be interest.


    £1200 sound very high, get statements from him.
    Originally posted by bris
    rubbish, the OP is being ripped off so lender can take a large jump.
    • Bluezulu
    • By Bluezulu 13th Mar 17, 12:35 PM
    • 4 Posts
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    Bluezulu
    • #8
    • 13th Mar 17, 12:35 PM
    • #8
    • 13th Mar 17, 12:35 PM
    Hi all

    Yes I did know it was being loaned off a credit card. Yes I did know there would be interest to pay.

    What I wasn't expecting was the interest would be so high. I believe the interest on the card for cash advances is 49%. But I don't know how to calculate it. If I had a ballpark figure based on that. I will be able to speak to him with that in mind.
    I've asked to see the statement, but he is reluctant to show me.

    As one of the previous posters has said. I suspect I am charged for other items on the card.

    Thank you all for your replies
    • Shakin Steve
    • By Shakin Steve 13th Mar 17, 12:38 PM
    • 1,036 Posts
    • 759 Thanks
    Shakin Steve
    • #9
    • 13th Mar 17, 12:38 PM
    • #9
    • 13th Mar 17, 12:38 PM
    What kind of person is good enough to take a chance on lending £2600, presumably without an agreement in place, and then try and rip off the loanee?

    Got it.......a loan shark.
    I came into this world with nothing and I've got most of it left.
    • nomoneytoday
    • By nomoneytoday 13th Mar 17, 12:52 PM
    • 4,718 Posts
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    nomoneytoday
    What brand of credit card was it?
    Was it a cash advance or a purchase?
    • eskbanker
    • By eskbanker 13th Mar 17, 2:03 PM
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    eskbanker
    I believe the interest on the card for cash advances is 49%.
    Originally posted by Bluezulu
    That would be for an entire year - he seems to be looking for you to pay close to 49% but only for about five months, so the pro rata interest (that he'd actually have paid on the £2600) should be closer to 49% x (5/12) x £2600 = £530ish.
    • Bluezulu
    • By Bluezulu 13th Mar 17, 3:59 PM
    • 4 Posts
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    Bluezulu
    Many many sir
    • Bluezulu
    • By Bluezulu 13th Mar 17, 4:00 PM
    • 4 Posts
    • 0 Thanks
    Bluezulu
    Cash advance
    • Marcio45
    • By Marcio45 13th Mar 17, 5:27 PM
    • 178 Posts
    • 83 Thanks
    Marcio45
    As it was cash advance there is also a 3% charge of the amount withdrawn. That is the cash advance fee.

    And then the interest. Normally cash advances have higher interest rate than purchases. But most prime cards wont charge more than 30% for cash advances (there might be exceptions). For 50% interest rate we would probably be talking about the likes of vanquis, aqua or capital one, mainly subprime cards.

    As you say you paid it in six months, so in the worst case scenario you would pay 25% interest (50% annual), aprox. £650. Maybee plus cash advance fees: 3% of £2600 which is £76. This is a very simplistic calculation, but in real life as you have to make monthly payments the interest will be lower.

    What i suspect might have happened is that you friend did not make the monthly payments as required, while waiting for you to pay him back. If this is what happened then late fees, maybee returned direct debits, the fees soon add up.

    To finalise, you need to check with your friend what is he actually asking you to pay.
    • ViolaLass
    • By ViolaLass 13th Mar 17, 5:34 PM
    • 5,073 Posts
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    ViolaLass
    You didn't think to clarify how much you would have to repay before borrowing the money?
    • CakeCrusader
    • By CakeCrusader 13th Mar 17, 6:53 PM
    • 359 Posts
    • 162 Thanks
    CakeCrusader
    Do you know what sort of card he used? Do you have any paperwork? The max amount for most sub prime credit cards is 2.5-3k, APRs are anything from 39.9% to 59.9%, and none of these would amount to £1,200 interest on a £2,600 cash advance which was only borrowed for a few months (Vanquis charge 59.9% interest and on a £1900 balance the interest would be about £350/400ish). It looks as though he's telling porkies about the interest he has to pay to make money out of you.

    I'd be really wary about this as he sounds like a loan shark more than a friend, Shakin Steve's on the ball. If he's lending money and he's making up his own interest charges then he needs a proper consumer credit licence and you need proper paper work. It would be wise to pop and see your local CAB and ask for advice; https://www.citizensadvice.org.uk/debt-and-money/borrowing-money/types-of-borrowing/loans/loan-sharks/
    • Superscrooge
    • By Superscrooge 14th Mar 17, 7:44 AM
    • 902 Posts
    • 627 Thanks
    Superscrooge
    Hi all

    Yes I did know it was being loaned off a credit card. Yes I did know there would be interest to pay.

    What I wasn't expecting was the interest would be so high. I believe the interest on the card for cash advances is 49%. But I don't know how to calculate it. If I had a ballpark figure based on that. I will be able to speak to him with that in mind.
    I've asked to see the statement, but he is reluctant to show me.

    As one of the previous posters has said. I suspect I am charged for other items on the card.

    Thank you all for your replies
    Originally posted by Bluezulu
    I agree with previous posts £1200 seems much too high.

    To simply things lets call it 50% annual interest over six months (half a year). So you would expect the interest to be approx 25% of £2600 which is £650

    A separate cash advance fee might increase it to around £700 but certainly not £1200
    • ViolaLass
    • By ViolaLass 14th Mar 17, 4:13 PM
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    ViolaLass
    Were no payments made between September and February? If so, there would be late payment fees too.
    • chattychappy
    • By chattychappy 15th Mar 17, 7:19 AM
    • 6,394 Posts
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    chattychappy
    If you agreed to pay his interest, ask to see the statements. If he is a "friend", he won't mind doing this.
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