Top Loaded Credit at Welcome Finance

LokiSDS

I realise this question must have been asked a thousand times, but I have been checking through the website and forums for information specific to this problem and I've not been able to find anything.

Here's the problem. My partner took out a loan with Welcome Finance in October 06 at an insane 60%. At the time she struggled to find finance elsewhere and welcome being the lovely fellows that they are, offered her this loan. She had just graduated and struggled elsewhere and did not have a very good credit rating.

As far as I understand it, she basically took out £2000 and was instantly left with a bill of £3800 because the "total charge for credit" was 1800.

I was talking at work with a friend who said there was maybe something she could do about this. Does anyone know if this is true?

My personal view is that, fair enough, she signed the contract for a 60% loan, but the fact of the matter is now, she could afford to pay it off, but there's just no point because the interest was charged up front, so she might as well keep paying until it ends. Are these types of loans legal?

If there's information on the site already about this, any links to the information would appreciated.

Thank you.

SavySaver_2

Yes you are right she signed up for the contract so not muh you can do about it. The rates are legal and WFS are regulated by the FSA.

If the loan was an unsecured personal loan and not HP then the interest will not be front loaded so if she pays it off early there will only be an interest penaly of around 2 months. So if she pays the loan of early then will probably save money in the long run. Also , if she took out any insurances, PPI etc make sure she cancels this if she doesnt need and get a refund on this.

One thing to point out tho.....WFs (Parent company Cattles plc) might not be around for much longer as their share prices dropped by 75% on Fri due to a predicted fall in profits for 2008!!!

http://www.dailymail.co.uk/money/article-1150859/Cattles-shock-alert-sparks-stampede-shares.html

petermb_2

LokiSDS wrote: »

I realise this question must have been asked a thousand times, but I have been checking through the website and forums for information specific to this problem and I've not been able to find anything.

Here's the problem. My partner took out a loan with Welcome Finance in October 06 at an insane 60%. At the time she struggled to find finance elsewhere and welcome being the lovely fellows that they are, offered her this loan. She had just graduated and struggled elsewhere and did not have a very good credit rating.

As far as I understand it, she basically took out £2000 and was instantly left with a bill of £3800 because the "total charge for credit" was 1800.

I was talking at work with a friend who said there was maybe something she could do about this. Does anyone know if this is true?

My personal view is that, fair enough, she signed the contract for a 60% loan, but the fact of the matter is now, she could afford to pay it off, but there's just no point because the interest was charged up front, so she might as well keep paying until it ends. Are these types of loans legal?

If there's information on the site already about this, any links to the information would appreciated.

Thank you.

I would get the agreement check out for its validity anyway. It is in the time frame to be challenged. 60% is a huge interest to pay.

However, I do think that there will be deductions from that projected interest charge as the previous poster said.