secured loan charges

bigbear26

can anyone tell me if it is legal for a company to increase your interest rate, but not increase your payments. I know this sounds good but I am concerned that in the near future they will ask for a massive increase in payments, which I wont be able to pay back, can anyone help me please.

POSSETTE

can you elaborate a bit more pls..what company is it and what are the interest rates/payments? By doing that they are obviously lengthening the time your paying for.

CLAPTON

almost certainly but it would depend upon the T&Cs of your agreement

however, it would be responsible of them to inform you of the change and give you the option of increasing your monthly payments

bigbear26

thankyou for your responces.

The loan is with everybodys favourite GE Money, the original loan was for £34,000 and the interest at first was £275 a month with the repayments being £315 a month, it is only recently beacause i was looking through the statements that i realised that the interest rate had increased from 7.9 % to 14.6% in a few years, i know after reading my statement that the loan was on a variable interest rate but when you take these loans it doesn't realy explain what variable realy means, ie nothing to relate it to unlike the bank of england base rate. But i would of thought that if they increased the interest rate on the loan then surely they have an legal obligation to inform me that my payments are increasing. At present the interest charged per month is £497 but as i have said my payments are still at £315 a month, it just doesnt add up.

CLAPTON

are you able to remortgage and clear this loan off?

vivaladiva

Bigbear. I have the same problem.
http://forums.moneysavingexpert.com/showthread.html?t=1668589&highlight=can+this

How did you find out about your interest rate? Annual statement by any chance?

bigbear26

thanks again for your responces.

The answer to the first question about remortgaging was how i found out that they had increased my interest rate and not my payments, i have been paying the loan for about 3 years now without missing a payment but have found that i actually owe them £3000 more than my original loan, even thou i have paid them approx £11,200. Thankyou for your feed vivaladiva, it made very interesting reading i certainly didnt know that they put there rates in the paper and that must have been a good guess that they only put it in small print on your yearly statement, but as i was saying i cannot believe that this is legal of them if they continue this way i will have paid them £96,000 back and will still owe them £96,000 they are a joke, there must be something legal that prevents them from doing this to there customers, how did u get on or have u still had no luck,

vivaladiva

bigbear26 wrote: »

thanks again for your responces.

The answer to the first question about remortgaging was how i found out that they had increased my interest rate and not my payments, i have been paying the loan for about 3 years now without missing a payment but have found that i actually owe them £3000 more than my original loan, even thou i have paid them approx £11,200. Thankyou for your feed vivaladiva, it made very interesting reading i certainly didnt know that they put there rates in the paper and that must have been a good guess that they only put it in small print on your yearly statement, but as i was saying i cannot believe that this is legal of them if they continue this way i will have paid them £96,000 back and will still owe them £96,000 they are a joke, there must be something legal that prevents them from doing this to there customers, how did u get on or have u still had no luck,

Re the rates in the newspaper - I'm not sure they do publish them. I did start writing a letter asking for confirmation of this, but when I read it back it sounded so ridiculous that I didn't bother. Their web site says their rates track Barclays Base Rate (currently 0.5 like BoE - I checked Barclays site too!). If this is correct, they seem to take the Barclays rate and then multiply it by whatever they like:rolleyes:.

Have you seen the advice for a newbie thread?
http://forums.moneysavingexpert.com/showthread.html?t=1740869
Are you due a statement anytime soon?

bigbear26

I have asked the same questions to GE money in regards to how they apply interest, they tell me that each case is individually looked into and interest is charged accordingly, they said that interest may increase if you are classed as a risk, whatever that means. I explained that I hadnt missed a payment or been late for 3 years but my interest has gone up about 7% more than the original agreement, they had no answer to that and said they would look into it, i've heard nothing which makes me believe that this is not legal for them to do this as surely they would increase there payments to them each month. It seems they just please themselves what they charge to each account to make more money for themselves. A friend of mine has told me that GE Money had recently been fined over £1,000,000 for something to do with there loans / mortgages, i'm looking into this to see what it can be.

vivaladiva

bigbear - did you use a broker?

This is one of GE's misdemeanors http://www.myfinances.co.uk/news/mortgages/bad-credit-mortgage/ge-money-fined-1-1m-$1242274.htm

They have been done over PPI mis-selling too.