Can anyone help me undertand my loan please

Teenie_D

Hi I am a bit embarrassed about asking this but I don't really understand when my loan is due to be paid up.

We (my DH and myself) had a previous (unsecured) loan with our bank (First Direct).
I fell pregnant and we had other debts so we took out another loan to pay off these debts and we wanted to reduce the intial loan repayments. I would be on maternity leave and going back to work part time rather than full time and felt, (at the time), we wouldn't be able to afford it-hindsight is a wonderful thing!

My DH phoned the bank and sorted it out (normally I would do it but was heavily pregnant and not really thinking straight) and the lady asked if we wanted to take out loan protection I remember at the time my husband asking how long the loan would be over and she said 7 years so we thought this would be a good idea.

I have been thinking about this now as we are desperately trying to get out finances sorted out, but looking at our loan I am confused about the period of time it is to be paid up over and since I can't find any paperwork regarding this loan I am wondering if someone can help me.

£16670 was paid into our bank in June 2007.
£9325 was taken out (to pay for previous loan)
There is a payment of £3620 coming out also, saying loan protection
£834 was paid back in to my account showing protection refund.

The remainder of the money was used to pay for outstanding debts.

This is where I am going to sound really thick and I apologise in advance!

Presumably the loan is for £16670-we are paying £272 p/m and started paying this on 01/07/07.
I cant understand how the loan would be taken out over 7 years surely it would be less than this? I dont have the APR unfortunately and I'll be honest I wouldn't really understand how to work it out anyway!

Looking back I am furious at myself for taking out the new loan but at the time it felt like the only solution (if only I had looked at this site then!!!).

Do you think the 7 years repayment time sounds right enough when you take interest into account?

Tixy

I think this works out to around a 9.5% APR (which sounds reasonable)

You have 84 repayments so the capital would be £198 per month, the reason the interest looks high is because of the length of time the loan is over.

(for info I used this calculator - http://www.moneymadeclear.fsa.gov.uk/tools.aspx?Tool=loan_calculator and put in all the figures and then adjusted the APR until it came to the correct monthly repayment)

However you may want to look at the loan protection and whether it could have been missold, were you given enough information - would it be likely to cover you etc. Read up on the reclaim board - and then talk to OH about what he was told at the time.

Teenie_D

Thank you so much for that I appreciate it. Unfortunately I have a few more years left of this loan then! Never mind once it goes I WILL be debt free and no more loans etc after that (unless I EVER get a mortgage!).

Will look into the loan protection but I do remember at the time the lady my hubby was speaking to went through it really thoroughly and explained about what it would cover but I will have a good dig around and find some paperwork to make sure it is going to be suitable for us.

Thanks again!