Egg loan-final payment rip off?

wuddy_2

I took out an Egg Loan in January 2006 for £10,491.12 Fixed interest rate of 7.66% PA. Total charge for credit £1,723.44. Total repayable £12,214.56 and it was for 48 months at £254.47

Now then, the last payment is due February 2010 and I receive a letter today telling me that the final payment will be for £319.30!!! Apparently this because the repayment date was on the 28th of the month and it incurs an interest payment for the first 30 days where no payment was received. Very convenient for Egg I think.

I remember the person selling me the loan, on the telephone, just asked me if I would like to keep it a the 28th of the month (As this was when a previous loan used to go out). At no time was I ever told that this would land me an extra chunk of interest.

I called Egg and got the "Read from a sheet" response of it being the borrowers responsibility to read all the terms and conditions on the paperwork etc. I feel like i've been conned...any suggestions would be most welcome.

Thanks!

milliemonster

Surely the paperwork you signed at the beginning of your loan term set out clearly what the repayments would be? quite often the first and last payments can be substantially more than the rest due to 'admin fees' etc

wuddy_2

Thanks for the reply

Yes it clearly states "48 payments of £254.47." Thats why i'm rather annoyed at Egg throwing the extra interest on.

milliemonster

If that's the case and nowhere on the T&C's does it say your final payment will be £319.30 then I would say you have good grounds to dispute this.

Have you varied the payment date at all during the term of the loan?

wuddy_2

No I've never taken any breaks on payment and never missed a payment. I've been 100% good boy for the Egg people!

milliemonster

So, if they have told you to read the T&C's, have you read them and does it say anywhere that they can vary the payments at all or does it say the payments are fixed for the term of the loan?

wuddy_2

The bit they are pointing me towards says...

"The first instalment is due on the 28th of the month following the date on which the loan is made unless this is less than 30 days from the date that the loan is made, in which case it will be due on the 28th of the following month."

I didn't do anything other than follow their instructions and never ever at any time, nor anywhere in the paperwork does it say that the final payment will be £319.30

milliemonster

In that case I would contact the financial ombudsman as they are clearly breaking their own payment terms

jonesMUFCforever

wuddy wrote: »

The bit they are pointing me towards says...

"The first instalment is due on the 28th of the month following the date on which the loan is made unless this is less than 30 days from the date that the loan is made, in which case it will be due on the 28th of the following month."

I didn't do anything other than follow their instructions and never ever at any time, nor anywhere in the paperwork does it say that the final payment will be £319.30

When exactly did you receive the money in your account?
When exactly did you make the first repaymnt?

wuddy_2

I think you have it there...thanks for the reply. I finally had a third person contact me from Egg who did explain this and its a very common one from bemused customers like me! I hope the info may help others. Here goes...

The loan cash gets credited to my account in January. Egg send me the paperwork and figures to sign based on a payment going out on the 28th February. There is some law or other that will not allow them to take a payment within the first 30 days of a loan as this is to be classed as a "Cooling off" period.

My first payment gets taken on the 28th March (Based on figures calculated for the payment being taken in 28th Feb) therefore, In a way, I am a month late with my first payment (Due to no fault of my own) and their own paperwork is only correct based on a payment going out in February, not March.

So, the loan amount is the same and the interest rate was still the same (7.9%), but the figures quoted on the agreement do not account for the first payment being taken a month late.....I am told this is a VERY regular query from Egg customers!!!