Un-requested loan

squeak24

Hi

I took a loan out in 2005, this was due to pay off a previous loan, but it never. Instead the bank simply added the sum from the previous loan onto the new one. They initially changed be interest. The interest rate is 20.9%

They have since removed the interest from the sum I did not request. The bank want full payment of the additional funds, or at a reduced rate. I have been advised (from someone who the bank will take notice of) that the only person who can decide how the loan is paid back is me. I am thinking about saying to the bank I am willing to pay back say £1 a week or £5 a month. I was wondering if this is the legal minimum, I simply can't afford what the bank has offered, if I did I would go hungry. The sum of money that is in dispute is now interest free.

Is there any set minimum? They have offered me compensation as well, I will be looking for more compensation than what they have offered for the mistake that they have made.

If this doesn't make sense then let me know.

FireworkCrazy

It would be easier if you stated how much the loans were.

chuckley

two loans from the same bank?! so the new loan ended up as an extra minus on the original debt?!

ie,
loan 1 £1500
loan 2 £1500 to pay off loan one. so down to 1 loan @ 1500.

but instead you have £3000 and extra interest?!

FireworkCrazy

Mmmm, At the end of the day you borrowed and spent the money. I would offer to repay the outstanding balance of the loan minus ANY interest on any of the loans.

squeak24

Chuckly that is exactly right.

I have a meeting with a manager from the bank next week which I plan to record and have a witness at.

Basically they have removed the interest from the money that I didn't request. But with the current agreement the repayments won't cover the extra money. I have stated this to the bank. They have said that they are willing to open an interest free loan for the money I did not request. I am willing to do this, but just want to know what the minimum amount is that I can pay back. I have been informed that this is around £1 a week or £5 a month. Is this true.

The bank did offer a repayment plan which I can't afford, either pay the full ammount off in full or pay it off or at just under £100 a month which I can't afford. I am about to loose my job due to a contract change so hence this is not possible. I would like to try and get rid of as many of my debts as possible before that happens. I do have enough to pay the origional loan off (thanks to a understanding family member) so would like get this sorted sooner than later.

Can anyone clarify what the minimum amount is that I can pay off per month? They have also offered compensation as well. I will be asking for more than what has been offered.

squeak24

also with the way this loan is as it is I am blacklisted so I can't get anywhere else to live, other bank accounts or something that I would be very reluctant to go down, and thats getting credit. They have said that they will only correct this when I agree to what they are demanding.

squeak24

Update on this, they refused the offer I made, they have also decided to close my account within 14 days, there is no justification as to why this is. The adjudicator at the ombudsman told me in writing that it was up to me how I repay the loan, not the banks. They also advised me to try and negotiate with the bank a repayment plan but they are refusing to talk, I have also now got this in writing. What the bank want me to pay I simply can not afford, if I did I would be spending around a half of my income due to a mistake made by them, on top of this I have rent and other bills.

I have asked for it to be passed onto the ombudsman. What else can I do, I just don't know how much more of this I can take. I have even thought that it will be a lot simpler if I was dead.

CLAPTON

all very unclear

you had a loan for 1,500?
you then intended to take out another loan for 1,500 to pay off the first one.

q1... why? what benefit was there in doing that?
q2. were you in default or behind with payments on the first loan?
q3. presumably both loans were with the same bank?
q4. instead they gave you a 3k loan... what did you do with the extra 1,500?
q5. when was the second loan taken out
q6. what were the terms... APR, monthly payments and number of payment due?
q7. when did you stop paying the agreed monthly payments?
q8.. how much is now in dispute ?
q9. how much is not in dispute
q10. what are you personal circumstances ... are you working etc...do you have other debts/.. post up an SOA.
http://www.makesenseofcards.com/soacalc.html






you mention the Obmundsman..
have you a made a formal complaint to them?

dane-katie

They will decline your offer of repayment, it will more than likely been sent to an external debt collection agency, they are only legally entitled to what you can afford and no more, i would get help from a debt charity like CAB or CCCS.

talana

I took a loan out in 2005, this was due to pay off a previous loan, but it never. Instead the bank simply added the sum from the previous loan onto the new one.

Ok, so assuming this happened exactly as you say, I can't understand how the problem has escalated till now.
You would have realised the mistake as soon as the extra funds appeared in your account surely?
At that point, you could have drawn the bank's attention to the mistake, the funds could have been returned and the loan cancelled.

Perhaps you need to post an SOA and get some advice on cutting your expenses/upping your income. Free up some cash somehow and you can perhaps make an offer they will accept.

squeak24

q1... why? what benefit was there in doing that?

I initially had a loan for £3000 to buy a car, a year later I had to take a loan out for £5000 as I was £1000 over my overdraft limit. The loan was due to pay off my overdraft so I could be in the black, the remaining was due to pay off the origional loan.

q2. were you in default or behind with payments on the first loan?

I was not in default or behind in payments, I took the new loan out to get out of the overdraft.

q3. presumably both loans were with the same bank?

Yes

q4. instead they gave you a 3k loan... what did you do with the extra 1,500?

I didn't notice there was any extra money in the account, at the time I was mentally unstable and about to undergo major knee surgery, I never thought about checking the balance, I find it difficult to go to the toilet and sleep let alone check my banking, the bank were sending my statements to the wrong address which was nearly 100 miles away, after the surgery they were going close to 400 miles away. Whilst I was off sock I recievd thousands of pounds from my employer and a return of a deposit, I also had an account where surplus money was swept into, I didn't get statements for this account

q5. when was the second loan taken out

a year after the first, both pre 2006.

q6. what were the terms... APR, monthly payments and number of payment due?

60 payments at 21.9%

q7. when did you stop paying the agreed monthly payments?

I haven't, the sum in dispute is not the loan itself. Instead of paying the £2000 back from the new loan of £5000, they instead added it so effectively the loan was for £7000 not the agreed ammount.

q8.. how much is now in dispute ?

£2000

q9. how much is not in dispute

£5000

q10. what are you personal circumstances ... are you working etc...do you have other debts/.. post up an SOA.

I work as freelance producer, about to start a new contract but that will terminate in June. I was full time when the loan was taken out but needed to recooperation due to a stressful working environment, working close to 90 hours a week and commuting 2 hours a day seven days a week. No other debt, I take home about £600 a month, but nearly £300 of this goes direct on transport for work purposes, this is before tax, i file a tax return each year.

The bank have made an offer which I can't afford, I would be spending over £200 on the loan repayments, leaving only £100 for everything else like food, phone bill etc. I currently live with parents as I can't afford to rent full time in the city I work in. I do have a place closer to work but I just pay on a pay as you stay deal.

you mention the Obmundsman..
have you a made a formal complaint to them?

I have made a complaint to the ombudsman. It has until recently been with an adjudicator, it has now been exculated to the ombudsman. I have been told that I am the only person that can decide how to repay this extra money. I have made an offer to the bank as they told me I should try an negotiate with the bank a payment plan. They have instead closed my account.

I have been to the CAB, I found they were about as useful a chocolate fireguard. They told me something but they were unwilling to justify it. I haven't heard of CCCS, I will look them up.