Payment Holiday My A**e!!!

ellustellus

hi,i called black horse the other day to make a payment a little late,they told me i could take a payment holiday! yay i thought as i could do with some help as im not gettin 5 solid days work at the moment. they then told me that my £248 payment would be moved to the end and obviously would ultimately end up costing me more. ok,so how much more i asked? for me to move a £248 payment to the end would cost me that payment,plus 3 EXTRA MONTHS! so £248 would end up costing me £1000!! i told them that could buy me a real holiday and made the payment quick sharp! how can they get away with calling these 'payment holidays' when all they are is a con that you have to wait for! where is the help in that? is there a bank out there that really does want to help? i dont think so,its all a ploy for more interest,imagine the amount of people that have said 'yes' to lloyds only to make them a huge chunk of cash at the end! is this legal???

Tel

MrsBartolozzi

This is standard practice, and is in the details provided with the loan/mortgage, and if you think about it it just makes sense. You will be paying interest on the extra balance for the rest of the term. I do know that our mortgage payment holidays cost us a fair bit, about another month and a half's worth in money added to the amount owed if I recall, and then there is the interest on that extra amount for the rest of the term.... We don't take payment holidays any more!

If you think of it another way you are borrowing the £248 for x years (rest of time on the loan) and will be paying interest on it accordingly.

ellustellus

well,if you look at it another way,if i was the lender,i'd be happy to move the payment to the end,charge the same interest,and add a 'holiday fee' of £100 or whatever. as whatever they charge is an 'extra' on the account,that way everybodys happy,but the banks just have to completely rip us off. "heres a little help now,so we can screw you later!" oh well! i wont use themit'll be cheaper to miss a payment,incur a charge and pay it back in dribs and drabs,as a payment holiday affects your credit rating anyway! nice!

Tel

Robert_Sterling_3

ellustellus wrote: »

so £248 would end up costing me £1000!! Tel

But this is exactly what must always surely happen.

Instead of paying them £248 now you pay them nothing now. So you have that £248 in your possession until the end of your mortgage. This could be decades away. So by the time you do pay you have to pay £248 plus interest compounded over let is say twenty five years. It is bound to come out quite high in relation to the £248. The fact that it is about £1,000 is not in the least surprising to the cognescenti. Anyone who understands compound interest will understand it. An interest rate of under 5% compounded for 25 years would bring about a situation like yours.

ellustellus

well this is over 5 years! work that out!

Robert_Sterling_3

IF it is over 5 years then I would say Wot a Chiz.