Welcome Finance help.. please

sylvia9121

Hello,

Just trying to get to the bottom of a confusing situation.... We took a loan out with welcome finance a few years ago for approx 20k.. :eek: I have been paying it off each month, the payments were £287 per month for a while and then mysteriously it went up to £330 PM. when I phoned them to ask why they couldnt really give me an explanation...the woman said that she wasnt very good at explaining it and that she would send me a statement through which would explain......

Anyway, we got this statement through the other day and I was shocked at what it revealed....
It says that the amount of credit provided was £22435...
Annual interest rate 16.08%
minimum payment 180 months
first date of movement 11/05

the first column says the date when payment has been made

second is transaction type

Debit

Credit

Balance.

It looks to me that they are charging us £284.94 per month interest and only £50 Per month is being paid off from the £330 I pay per month

After paying a who years worth of £330 the balance still stands at £21.011.02

I am trying to make sense of this! - Is this correct???? seems like I have only paid off £600 in a year, despite paying more then £4k!

Thanks
Sylvia

BenL

The payments at the moment will be heavily loaded to paying the interest and less capital.

As you move through the repayment period the balance of the payments will shift more to the capital.

By the last payment in about 15 years you will pay maybe £320 off the capital and £10 in interest that month.

I guess they have given you a variable rate loan and they can do what they want with the interest rates. From reading about Welcome on these boards I wouldn't hold out hope for the rate to be reduced.

Bank of England Interest rates are at the lowest they will probably go, when the rates start to go up Welcome will write to you to tell you they are doing the same.

Did you borrow £22435?

If you pay £287 for 180 months (15 years) you will pay back £51660

£330 a month will be £59400 in total.


In the future if you are in a position to repay the loan some of the interest charged will be refunded and a redemption figure (plus any charges in the terms and cons) will be calculated for how long the loan has run already.

sylvia9121

thank you,

I believe we borrowed £20k but the "other amount" was for some "Admin" fee... it makes me sick to my stomach that we ever borrowed from them.. still you live and learn!!

Thanks a lot

Regshoe

sylvia9121 wrote: »

thank you,

I believe we borrowed £20k but the "other amount" was for some "Admin" fee... it makes me sick to my stomach that we ever borrowed from them.. still you live and learn!!

Thanks a lot

Seems a bit steep for an "admin fee" to be honest. Check you loan agreement (get them to provide you with a copy if you can't find yours) to see if you have any PPI (payment protection insurance) or other insurances on top, they always used to try and sell "PPP and Addons" i.e. extra insurance products with the loans. Your setup fee will have been £125 (I think that's right, £75 for pers and £125 for secs, or something close to that).

You can probably check to see if the insurances were missold (I'm no expert on this area - but there are other people on this forum who will be able to help).

The jump from £287 to £330 will probably have been when they upped the interest rates on secured loans a few months back (pers are fixed rate at welcome and I think all the secureds were sold as variable).