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  • FIRST POST
    • Grazeley
    • By Grazeley 1st Oct 17, 9:41 PM
    • 24Posts
    • 6Thanks
    Grazeley
    Given wrong advise - massive mistake
    • #1
    • 1st Oct 17, 9:41 PM
    Given wrong advise - massive mistake 1st Oct 17 at 9:41 PM
    Hey - I've posted before about this.
    A year ago we took out a £29,500 secured loan to consolidate unsecured debt (credit cards, catalogues and even my bloody mother who paid for my new boiler, she sure wasn't charging interest, majority of the debt was 0%). I am now completely aware what a monumental mistake this was. I was suffering with some mental health problems and was pregnant at the time - no excuse but I was not my usual self.
    We took this out on 'advise' from a financial planning company who I had worked with previously on life insurance. He was very full on, for example the day he was first due to come to our house to meet I actually phoned him and tried to cancel the appt as we didnt think the loan would be a good idea, but he insisted he just come for a chat anyway. He used to call me at 8.45am as I was on my way to work. Even after we met we didn't agree straight away, we had reservations - but he kept calling and visited again. Short of it is we went with it and consolidated our debt - mthly payments remained around the same as they were anyway so didn't save us money - he sold it as 'tidying everything up'.
    I just got a settlement figure and its £3k more than we even borrowed, for every £370 I pay each mth we only pay off £20 - I knew the term of 25 years of the loan would pay back a extortionate amount but we never planned to keep it for the full term. But in 1 year to see those figures!
    I am so angry - with myself and with him and his company. I hate being made a fool of. He's got his commission and off he's toddled.

    Just musing if there is anything at all I can do. I don't have any written correspondence between us, it was all at my house and on the phone.

    I feel i have no option but to absorb this onto my upcoming remortgage - i know not a good idea but i cannot pay that out for another 25 years.

    Thanks for any thoughts.
Page 1
    • zx81
    • By zx81 1st Oct 17, 9:50 PM
    • 14,375 Posts
    • 15,157 Thanks
    zx81
    • #2
    • 1st Oct 17, 9:50 PM
    • #2
    • 1st Oct 17, 9:50 PM
    No. It was your choice to take the loan. You now need to focus on clearing the loan.

    What rate are you currently paying? What are your incomes?
    • forgotmyname
    • By forgotmyname 1st Oct 17, 9:56 PM
    • 26,214 Posts
    • 10,468 Thanks
    forgotmyname
    • #3
    • 1st Oct 17, 9:56 PM
    • #3
    • 1st Oct 17, 9:56 PM
    Check the fees for early termination....

    Will you get a decent rate with 29.5k of debt already?
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • iammumtoone
    • By iammumtoone 1st Oct 17, 10:02 PM
    • 5,348 Posts
    • 11,005 Thanks
    iammumtoone
    • #4
    • 1st Oct 17, 10:02 PM
    • #4
    • 1st Oct 17, 10:02 PM
    No. It was your choice to take the loan.
    Originally posted by zx81
    But is wasn't an independent choice, the OP was advised this loan was best for them.

    I thought if you paid for financial advice or the person giving it earns commission they are not allowed to give 'bad' advise.
    Sealed pot challenge ~ 11 #017 - Open 1st Nov


    • Grazeley
    • By Grazeley 1st Oct 17, 10:03 PM
    • 24 Posts
    • 6 Thanks
    Grazeley
    • #5
    • 1st Oct 17, 10:03 PM
    • #5
    • 1st Oct 17, 10:03 PM
    15.8% on the loan, variable rate. Salaries combined £59,000. I've done a SOA and we can't overpay on it. I just feel it's not chipping away at it, £20 a month and it's gone up from what I was lent which I wasnt in understanding of.

    There is a £120 discharge fee, that was added into the settlement figure. It can be overpaid or repaid early.
    • Grazeley
    • By Grazeley 1st Oct 17, 10:06 PM
    • 24 Posts
    • 6 Thanks
    Grazeley
    • #6
    • 1st Oct 17, 10:06 PM
    • #6
    • 1st Oct 17, 10:06 PM
    But is wasn't an independent choice, the OP was advised this loan was best for them.

    I thought if you paid for financial advice or the person giving it earns commission they are not allowed to give 'bad' advise.
    Originally posted by iammumtoone
    This is what annoys me, how can he run a financial planning company and give advise like this out. One quick visit to MSE has made clear that it is not good advise, only wish I had done that first instead of down the line.
    • zx81
    • By zx81 1st Oct 17, 10:07 PM
    • 14,375 Posts
    • 15,157 Thanks
    zx81
    • #7
    • 1st Oct 17, 10:07 PM
    • #7
    • 1st Oct 17, 10:07 PM
    Have you considered consolidating small amounts at a lower rate?

    You won't shift it all, but a small loan or a 0% money transfer card could ease the pressure.
    • Grazeley
    • By Grazeley 1st Oct 17, 10:10 PM
    • 24 Posts
    • 6 Thanks
    Grazeley
    • #8
    • 1st Oct 17, 10:10 PM
    • #8
    • 1st Oct 17, 10:10 PM
    Have you considered consolidating small amounts at a lower rate?

    You won't shift it all, but a small loan or a 0% money transfer card could ease the pressure.
    Originally posted by zx81
    Oh no I hadn't considered that, I will take a look thanks.
    • Dobbibill
    • By Dobbibill 1st Oct 17, 10:11 PM
    • 2,537 Posts
    • 3,631 Thanks
    Dobbibill
    • #9
    • 1st Oct 17, 10:11 PM
    • #9
    • 1st Oct 17, 10:11 PM
    You may want to post your SOA - either here or over on the DFW board.

    That's a fair salary to be tied up with no room to overpay anything.

    I would like to think that the good people on the forum would be able to find savings you can make to free up some disposable income for overpayments or another type of solution.
    I'm a Board Guide on the Energy, Student Money Saving, UK Armed Forces and
    Local Money Saving - Wales boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.


    A person who never made a mistake, never tried anything new.
    • Grazeley
    • By Grazeley 1st Oct 17, 10:19 PM
    • 24 Posts
    • 6 Thanks
    Grazeley
    You may want to post your SOA - either here or over on the DFW board.

    That's a fair salary to be tied up with no room to overpay anything.

    I would like to think that the good people on the forum would be able to find savings you can make to free up some disposable income for overpayments or another type of solution.
    Originally posted by Dobbibill
    Thank you, yes had some wonderful help on my SOA on the DFW board a few months ago. Issues are we now have credit card debt built back up (0% so just plan to chip away at it - awful I know but we had no choice as I was on unplanned for (financially) maternity leave) And childcare costs which are always such a massive financial commitment. So my detailed SOA leaves no wriggle room for a while at least.
    • Pixie5740
    • By Pixie5740 1st Oct 17, 10:48 PM
    • 11,196 Posts
    • 15,643 Thanks
    Pixie5740
    Have you raised a complaint with the financial adviser?

    https://www.moneyadviceservice.org.uk/en/articles/financial-mis-selling-what-to-do-if-you-think-its-affected-you
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • BrassicWoman
    • By BrassicWoman 2nd Oct 17, 6:55 AM
    • 1,373 Posts
    • 5,826 Thanks
    BrassicWoman
    But is wasn't an independent choice, the OP was advised this loan was best for them.

    I thought if you paid for financial advice or the person giving it earns commission they are not allowed to give 'bad' advise.
    Originally posted by iammumtoone
    But how many people do we see here looking for "one easy payment" and would think anything that gave them that was great advice? It's all subjective.

    I think the real problem is only being able to pay £370 a month off a joint salary of £59k. I'd expect to see twice that, when over £3k is landing in the hand. The lifestyle seems too extravagent for the income.
    Downsized and mortgage free
    Dec 17 grocery challenge £89.65/ £120
    • BrassicWoman
    • By BrassicWoman 2nd Oct 17, 7:15 AM
    • 1,373 Posts
    • 5,826 Thanks
    BrassicWoman
    Grazely, I've had a wee look at your posting history. I think you have tried an SOA and found it tricky to stick to the lower budget; and I think you are panicking and looking for a way out now.

    There are a few ways.
    - Up your income
    - lower your spending
    - downsize the house
    - run on one car
    - debt management plan

    But ALL of these involve you and the family working as a team.

    Are they with you, or are you trying to change this on your own?

    How radical are you prepared to be?

    And can you actually stop spending? Your SOA post suggests you ran up and extra 8k on a credit card due to maternity leave - with housing etc costs already paid and a salary coming in, that is MASSIVE.

    Do you know how to shop, cook, dress like a thrifty person?

    Do you want to learn?
    Downsized and mortgage free
    Dec 17 grocery challenge £89.65/ £120
    • Dobbibill
    • By Dobbibill 2nd Oct 17, 7:35 AM
    • 2,537 Posts
    • 3,631 Thanks
    Dobbibill
    Thank you, yes had some wonderful help on my SOA on the DFW board a few months ago. Issues are we now have credit card debt built back up (0% so just plan to chip away at it - awful I know but we had no choice as I was on unplanned for (financially) maternity leave) And childcare costs which are always such a massive financial commitment. So my detailed SOA leaves no wriggle room for a while at least.
    Originally posted by Grazeley
    I looked at your SOA post from back in March.

    http://forums.moneysavingexpert.com/showthread.php?t=5620146

    Unless this has changed dramatically, you are going to remain in this vicious circle.

    If you haven't had chance to change it yet then I would suggest doing so ASAP - while the children are young is the best time to make cut backs, they are unaware of trends, fashion or the latest fad - this normally changes as they get older
    I'm a Board Guide on the Energy, Student Money Saving, UK Armed Forces and
    Local Money Saving - Wales boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.


    A person who never made a mistake, never tried anything new.
    • Grazeley
    • By Grazeley 2nd Oct 17, 8:35 AM
    • 24 Posts
    • 6 Thanks
    Grazeley
    Oh yes, my SOA has changed since March, I took on the advice.

    I'll re-do my SOA and post it :-)
    • PeacefulWaters
    • By PeacefulWaters 2nd Oct 17, 4:29 PM
    • 7,294 Posts
    • 9,032 Thanks
    PeacefulWaters
    "Advice" can mean the best product for your needs from their product range.
    • enthusiasticsaver
    • By enthusiasticsaver 4th Oct 17, 11:35 AM
    • 4,831 Posts
    • 9,125 Thanks
    enthusiasticsaver
    Debt consolidation loans should come with a massive health warning. Unfortunately the advisor will not be held liable as although almost always they compound problems by not changing the spending behaviour of the debtor and delaying them dealing with their overspending it could be argued that the advisor was not to know you were going to continue to run up credit card debts once the debt was paid off through the secured loan. What is more galling though is the fact that the interest rate is not at all advantageous and if some of the debt was at 0% this is actually a much more expensive way to clear the debt.

    I think I would try writing to the financial advisor to that effect pointing out the rate is actually more expensive than the debts you repaid with the loan but I do not hold out much hope that legally you have a leg to stand on. You presumably signed the loan agreement so the onus is on you to check these things out. Expensive lesson but all you can do is move forward now.

    As others have said posting an soa would be a good start. You will not get refinancing for that amount on 0% so if you are able to make lump sum repayments that is where I would start by doing balance or money transfers to get rid of it. Not easy though if you already have other credit card debt. There may also be penalties for early repayment. I am staggered that £29500 is going to cost you £111000 over the 25 year period and agree getting rid of it should be a priority.
    2 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Malthusian
    • By Malthusian 4th Oct 17, 3:16 PM
    • 3,435 Posts
    • 5,271 Thanks
    Malthusian
    If this was an FCA-regulated adviser then a complaint to them, followed by a complaint to the Financial Ombudsman if their final response is unsatisfactory, would seem to have a very good chance of redress being awarded. I'm surprised at the number of posters saying "you don't have a leg to stand on".
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