early repayment charges

sb007_2

HI GUys

I wondered if you could help me with the following problem I currently am facing.

I took out a secured loand of £34 k 7 months ago(I know secured wasnt the best thiong to do but at that amount and my credit score it seemed the only way to do it as I desperatley needed the money). ANyway, the loan is with GE Money or First national as they used to be called. I got the loan via loans.co.uk and they said an ealry repayment charge will be a couple of months interest. I have now contacted GE and they say it is six months interets which works out to be around £3000. This is a huge figure to pay back but not sure whether or not they can hold me to it as I was under the impression of another figure. They told me to look at the contract and that is what is says six months.

Can anyone give me advise as how to pay this back without such a huge increase?

Your help is as always hugely appreciated

Regards

grumbler

sb007 wrote:

... a secured loand of £34 k ... six months interets which works out to be around £3000.

Do you mean that your secured loan is at about 18% APR? :eek:

sb007_2

no the contract says 8.9%

tempest42

Sounds to me like a 'punative charge' , I would check out https://www.bankactiongroup.co.uk

grumbler

sb007 wrote:

no the contract says 8.9%

In this case six months interest should be about £34000*8.9%/2=£1513. Where does the figure £3000 come from?

tempest42

Contract or not even £1513 doesnt in anyway reflect the ammout of work they would have to do to close this loan down. Sounds like an unfair contract.

homer_j_3

early repayment charges are not a proven case and whilst I do not want to be neagtive here, the key argument back from GE will be what was said on the paperwork when you agreed to lend.

I am not sure whether secured lending and unsecured makes any difference for the illegal charges argument but the essence of that thread is that the charges do not accurately reflect the costs involved for what they are charging you for.

If my logic is working correctly, I would guess that it would be down to you to prove that it has not cost GE £3000 in setting up the loan and for the benefit of receiving an 8.9% loan. This £3000 may be justified by the commisison paid to loans.co.uk and the admin costs and costs involved with setting up the account so they could actually say that they have not even reached breakeven point yet - may have been different story had you had the loan for 18 months..

TBH, I am not entirely sure how that would be calculated or justified from eitherside but I guess that it cant hurt by trying to get this reduced/waived.

tempest42

Homer_j - How very well put, dont think I would be paying the full 3k without some debate on here.

sb007_2

Thanks guys I will fight my corner Might take some time as they tend to drag their feet with decisions. I will let you know the outcome once I get it.

Thanks Again