Is ex playing a fast one with personal loan ?

clearbluesky

Hi , I hope someone here in money land can help!
My ex boyfriend took a loan out several years ago on my behalf for £8000, the term was 48 months, then a balloon payment of £2500 or an extension of a further 18 months. I agreed to pay the loan at £160.00 per month as I was led to understand the monthly payments were £158.00. All well and good.
He then dumped me before the payments had even started !! but I paid the loan via bank transfer each month .

I had missed 2 payments since Christmas and received a letter from him threatening court if I don’t revert with a payment plan . I can totally understand this and would feel just the same if things were the other way around .

The best thing I thought to do would be to take out my own loan and settle his loan early, my new monthly payments would then be smaller and more manageable.

But now it gets strange , I requested from him a settlement figure from the bank , he said they couldn’t give one over the phone but insisted that I owed over £4500.00 to settle ( I have already paid £4800.00 so far ) I asked for a copy of the loan agreement which I noticed the loan was just £142.00 per month not £158 as I was led to believe !
the total payable with interest over the full term was £9350. Surely I would not be paying the full interest if I settled early ?
I actually phoned the bank with whom the loan was with, and they said of course a customer can get a settlement figure over the phone, and that anybody could pay the loan off.
Now having the money to pay off this loan , I contacted my ex boyfriend and offered to go to the bank personally and pay this debt off in full so everybody could be happy.
He came back to me saying that the loan was no longer with that bank !!! and some other nonsense fibs

I suspect that the original loan was paid off in the early days by a third party and that he/they are making money from me.
Can he legally do this ? My agreement was to pay the bank loan which was taken out for me.
It would appear that he has got himself into a bit of a pickle as he has been telling a few porkies including making out that the loan with the original lender was still active.
I have no idea where I stand ? I have been almost begging for an early settlement figure to pay off this loan , but I am just being pushed around , almost as if it’s a game.
Should I go to a solicitor ?
Help !!

standupguy

It sounds like the original agreement was a lease purchase or PCP agreement.

The first thing to do is a HPI check - that will tell you if there is finance outstanding on the car and who it is with.

As you are aware you need to see in writing the settlement figure that relates to this vehicle.

You could stop payments to force his hand?

clearbluesky

Hi, it was to buy a car, but the lender never asked for any car details, so it appeared to be more of a regular personal loan. I am not sure but the bank may have just marketed the loan as a car purchase PCP type loan.
Whatever , this loan does not exist any more ........ its all very confusing

Godders

They may have added the interest to the loan at the very beginning, so from the outset you almost immediatly owe £9350 and you have paid off the interest over the first part of the loan.

However TBH if your ex has refinanced the loan somewhere else then thats nothing to do with you. If he has written to you threatening court due to missed payments then I say write him a clear letter requesting all paperwork to do with this loan, remind him what you agreed to (if you signed anything at all that is) and be firm. As far as I can see you didn't sign or agree to anything except verbally - you first sentence says - "my ex-boyfriend took a loan out several years ago. . . . " - I don't think it matters that he took it out for you, he still signed the paperwork

elainey_2

Is your name on the loan agreement? If not, you shouldn't be liable to pay the loan, as it's his responsibility.

HTH

Love Elaine xxx

jamesd

There are two different loan agreements here. One is the one he has with his lender.

The second is the loan agreement that you have with him. So far you've missed two payments. Have you caught up yet?

Are you still paying the loan company directly or are you paying him? If you're paying them directly then how can the loan not be with them still?

Since the loan is in his name it's difficult for the loan company because they have him as their customer, not you, and privacy laws would prevent them from telling you much, if anything, about the details of this specific loan. You might be able to get them to tell you what the early settlement figure would be in theory for a loan with the terms you've described, so that you can pay them that much.

If you can get the correct early settlement figure for this specific loan then you could pay that and see if he's willing to go to court over any higher amount he wants from you.

You can expect that he would take you to court to recover his money if you failed to repay the loan you have from him. But that doesn't prevent you from paying off the capital early at any time and saving all future interest.

If you'd like to settle the loan then if he's unable or unwilling to provide an early settlement figure that makes sense, provide details of the APR, starting date, ending date and monthly payments, including any initial payment at a higher or lower amount, and someone here should be able to work out what the settlement figure would be using the usual mortgage-like calculate for early settlement that's now required.

In loan accounting it's quite common to add all of the interest and all of the payments initially but you are not required to pay that amount minus your repayments if you settle early. Instead it's calculated using very specific rules that treat the loan like a mortgage and work out how much of the initial amount lent would still be outstanding. If he's telling you that the early settlement figure is 4500 to settle and you've paid 4800 when the total cost initially was 9350 then you need to find out whether this is including the balloon payment. If it is, then it makes sense. If it is not including the balloon payment then he's lying and is not providing an accurate early settlement figure.

If he threatens to take you to court over any further payments after you settle then you can let him do that and provide in your response to the court the details of the original agreement between you, the dates and amounts that you paid and the settlement paid. It seems unlikely that his claim will succeed after that.

Before going with the solicitor route, try to get the settlement figure from the original lender and pay that. This way you'll know whether the loan is with them still or not and get an accurate amount still owed. That would take into account any overpayments that you have been inadvertently making if you were paying 158 and it should have been 142, provided the 158 was going direct to the loan company.

Rafter

clearbluesky,

The APR on your loan with your ex is 11% and therefore the total amount payable had the loan been extended and gone the full 66 months would have been £10,560.

After paying £4,800 off, the current balance appears to be £4924.

It would be usual to charge a 1 month interest penalty for early settlement which is about £44 based on your current loan balance, so a total of £4968.

Suggest you offer him £5k in full and final settlement acknowledging that you have missed a couple of payments.

However, if the loan is in his name and he has nothing in writing, there is not much he can do about pursuing you.

Certainly if you made this 'fair' offer then there would be no point in him pursuing you though a solicitor as your settlement would be totally fair based on normal commercial terms.

If he did try to pursue you for the balance of payments due, that would work out at £5,760 but he seems to have no basis for doing this and it is irrelevant to you if he has subsequently refinanced.

Good luck

R.

jamesd

Rafter wrote: »

However, if the loan is in his name and he has nothing in writing, there is not much he can do about pursuing you.

Nothing except taking her to the county court and getting a CCJ against her, then seeking an enforcement order. The possession of the item purchased combined with the source of the loan repayments to date seems like ample evidence of the existence of the contract between them.