Incorrect apr - please help?

hullman

Hi,

First post, got a small 'top-up' loan of a few hundred £, but due to 'settling' an outstanding balance and PPI on the new higher amount, i now owe thousands. I received a statement which showed that although i had paid for a year, due to 'capitalisation' the amount had only decreased by a couple of hundred pounds

to cut to the chase, i have been advised that the APR they quoted on the agreement is incorrect, and the margin of error is higher than that permissable by law. Does anyone know for sure if i can put the account into dispute on this basis, and challenge it's validity.
I am one for paying back money i have borrowed and a reasonable level of interest, but this is ridiculous
Many thanks in advance

GeorgeUK

Were you aware that PPI would be added to the loan amount?
Were you told you had the option of taking it or not?

If not, then you may be able to claim that the PPI was missold.
http://www.moneysavingexpert.com/reclaim/

dancingfairy

A couple of thoughts from me:
1) it is possible that the loan apr is incorrect -don't know but one possible suggestion is that interest has been front loaded to the loan? I'm not entirely sure how it works but can't interest for the whole period of the loan be added up front so that even if you pay the loan off early you pay the loan plus interest as if you had continued with the loan.
2) Perhaps posting on the loan board may help with this? perhaps if you can give facts and figures they can asses whether you are indeed correct that the apr is wrong - I'm not sure who told you it is wrong so don't know whether you are right.
3) perhaps the apr is compounded? I know with savings accounts you get interest on interest so maybe the same is with loans? again would check with the loans board.
4) if it turns out that the apr is indeed wrong then I would have thought that there would be some process to challenge it but am not sure what it is - oresumably you could go through the banks internal complaints procedure?
Anway hopefully some of this is of some help to you.
df