Loan Mistake - What can we do?

guruchelles

Hi All,

Brand new to the forums. Have tried to find the answer to this elsewhere, so apologies if I missed it.

Basically, my partner went and got a loan yesterday from his bank. He earns a good wage and, as far as I am aware, has a good credit rating. I stayed at home while he went to sort it out.

The trouble is, he's come back with a bank loan for £18,000 (what we agreed) at an interest rate of 17.7% APR! This is from Lloyds TSB. I can't understand why the rate is so high. I don't think he realised it was because he signed the paperwork and the cash was released to his account straight away.

My question is now, what can we do? Is there a cooling off period even though the cash has been released? Can we apply through somebody else and pay back this one? I'm guessing not as we'd have to pay massive charges. I'm really stuck and would appreciate any help with this mistake.

Thank you.

guruchelles

More information:

Having just read some more of the small print, they say that early repayment will incur 58 days' interest as an 'administration fee' unless it's within 30 days of the loan being opened, in which case it's £1 admin fee. The illustrative example of settling the loan after a quarter of the term is £16,126.

Does this indicate that there is no other massive settlement fee?

Dave101t

its all in the contract, from what you have said yes there isnt another fee, but there is always alot more jargon than you listed!
go back today, RIGHT NOW, and cancel the loan, you have 14 days for any credit agreement to return the money without penalty. any high street will give you a 8% loan rate on around 20k

CLAPTON

58 days is about 'normal' so a £1 fee for the first 30 days seems a very good deal.

It would seem that there would be no other fees but read the whole contract right through a couple of times.

guruchelles

Dave101t wrote: »

its all in the contract, from what you have said yes there isnt another fee, but there is always alot more jargon than you listed!
go back today, RIGHT NOW, and cancel the loan, you have 14 days for any credit agreement to return the money without penalty. any high street will give you a 8% loan rate on around 20k

I think you're right, and I would be inclined to do this. The only thing I am concerned about is cancelling it and then not being able to secure the money through somebody else.

Can I (my partner) apply for a different loan first, or would they take one look at the recent activity on the credit file (ie, getting this loan) and say 'DECLINED' straight away?

Fonz_2

He would need to declare this existing loan on a new application so a new lender would view him as having access to £36,000 total credit which, unless he's earning serious money (~£100k at a minimum I'd guess) it's going to represent an enormous amount of his takehome.

mrcow

Have you cancelled it yet?

jonesMUFCforever

Believe it or not banks tend to give their customers the best rates on loans that their credit rating warrants - so the poster who says that they will give out £20k loans to all and sundry is way off the mark.