Theyve been overcharging me for ages

narabanekeater

Hope someone can give me some good advice. About 3 years ago we took out a personal loan. I phoned them last week and told them that I was looking at taking the loan elsewhere as the intrest rate was much higher than it needed to be. They have today sent us a settlement figure and it states on it that the rate we have been paying is 11.9%.
This didnt sound right to be so I have dug out the paperwork and the loan we signed for was at 10.9% (I know not a large difference but still) Theyve been overcharging us by 1%
Whe I questioned this the lasy said it must be a typing error and for the last 3 years approx weve been paying the higher rate not what we signed for.
All of this is on paper and signed by us.
Now my plan is to get this loan down as much as possible in way of Apr. The write to them questioning why weve been paying a higher rate than what we signed for as a fixed rate. If they discount what rate we are now paying from 11.9 to 9.9% then id be happy.
Im then going to write to them asking for the 1% difference to be sent back to us and as they awarded me a 2% decrease or whatever they do offer us id like them to take that discount off of the 10.9 that we signed for.
Does anyone think I have an argument against them?
Also what should I state in my letter. Have they broken any rules by not charing me as stated. Should I quote any acts if so which
All advice is most welcome
Im off now to work out how much ive been overcharged
Thanks
Also do you think I Should ask for compensation?
Cheeky I know but this is going to take postage and phonecalls to sort out!

matthew6476

My advice would be to try and take it elsewhere!

If on the original loan agreement, which you and they will have signed, it says 10.9%, then this is what you should have been paying. If they say different, you are perefectly entitled to ask for the money back, because, as far as you were concerned you were paying the right rate. Whilst this will cause someone in the bank major headaches in working out what you have overpaid, the error is theirs, and not yours.

If they agree to this great, but I dont think they would just reduce your rate to keep the business. Instead they would have to clear the first loan with another loan (incurrring early repayment fees in the process). This process is called churning, and is very much frowned upon in this era of "responsible lending", and i doubt if your bank would allow this to happen, unless you wanted to increase the debt, say to pay for Xmas and clear the loan.

I would try and play your bank off another lender, and see what rates you are offered elsewhere. As a general rule, the more you borrow, the cheaper the loan, but you did not say how much the loan was for, so I dont know if the rate is good or not. I would say as a general rule that anything less than £5000 would be charged above 11-15% or more, but you may be able to find a cheaper one.

If you do go elsewhere, see my post about early settlement fees and how to avoid them by clicking here: http://forums.moneysavingexpert.com/showthread.html?t=119730

Hope all of this helps, dont let em get away with it!!!!!
Matthew

Xbigman

Your credit agreement is legally binding both ways so you should write (recorded delivery) and demand the 1% back clearly stating it is their mistake. Say that you have been 'financially disadvantaged' in loss of interest on money they have wrongly held as well as spending your time sorting it out. Yes ask for compensation for this, I'd suggest £75 as a good non greedy but worth having amount.
I'd wouldn't bother asking about any rate reductions right now as this will complicate matters, but once this is settled look around and see if you can get a lower rate. If you can use that as a separate argument to get a reduction.
Regards



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