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first plus loan - any ideas or help!!

We took out a £39,000 loan with first plus and have made 50 month's worth of payments at £500 a month. We have never missed a payment and wish to start overpaying so that we can clear it (it was taken out over 15 years). I phoned to get a balance and the loan still stands at £35,000 after £25,000 of payments. Every time we make an overpayment (minimum of 10% of the loan's balance) we are to be charged £60 and an unspecified interest charge will be added to the account. The APR is 13%. What on earth can we do to clear this as we are on a debt free programme and was to emigrate to New Zealand. We are ordinary customers (a family with one small child) who got into financial difficulties when one of us was made redundant hence the need for a consolidation loan. We are being fleeced of every penny we have on exorbitant interest rates and want to get out of it as soon as possible. I posted this thread initially in the loans section but somebody recommended debt-free wannabes would be more appropriate. Any advice will be greatly appreciated!!!
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Comments

  • lynzpower
    lynzpower Posts: 25,311 Forumite
    10,000 Posts Combo Breaker
    Quite a few people have had problems with first plus loans, I havent had one so I really dont know . HAve you got the T&Cs ?

    I would ask on the consumer action group website as to whether these £60 can be justified under contracts legislation - aside form that I really dont know sorry :confused:

    https://www.consumeractiongroup.com/forum
    :beer: Well aint funny how its the little things in life that mean the most? Not where you live, the car you drive or the price tag on your clothes.
    Theres no dollar sign on piece of mind
    This Ive come to know...
    So if you agree have a drink with me, raise your glasses for a toast :beer:
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    you need to read the T&Cs to see whether its worth overpaying.

    your main options as i see it is

    a. if your credit rating is good see whether you can get a loan at a better rate to pay off the First Plus ....but firstly confirm (in writing) the actual settlement figure from first direct.

    b. simply save the 'overpayment ' in the best saving account you can find.

    c. obviously you can over pay each month but a fee of 60 seems rediculous but without the full T&Cs its not possible to compare the different scenerious.

    i can't see why you shouldnot go to NZ if you want, there's nothing to stop you continuing to pay the loan back from there or is the loan secured on the house?
  • We had a firstplus loan a few years ago, taken out to consolidate debts and lower monthly outgoings. After 20 months at £400 a month, we were able to remortgage and get rid of firstplus. In less than two years, they made a profit of £14 000 out of us - the original £30k, the repayments, and a £6k early repayment charge. We paid nearly 50% more than we borrowed in less than two years. :mad:

    firstplus and all the other companies that advertise solutions on TV are out for what they can get and should be avoided at all costs. I know this doesn't help in your situation, but it may help others thinking about firstplus to come to the right decision.

    I wish I could be more positive for you, but I don't think there's any way of stopping them screwing customers in real need. Hope it works out.
    It's better to light a candle than to curse the darkness.

    :idea:

    Lightbulb moment - January 2005.
    Thanks MSE.
  • I know this is no help to your situation, but this should be a lesson to all and this is one reason why Martin protested about Carol Vorderman advertising these loans.

    With regard to being charged £60 every overpayment. You could store up all your overpayments and just pay once a year.

    If I was you, I'd accept I'd made a total erroe, get a settlement figure and pay the bar stewards back.
  • honory
    honory Posts: 34 Forumite
    Thanks for all your help. The loan is secured on the house and the T&Cs do stipulate charges and interest will be added in the event of early settlement, partial repayment and change of term. We will save the money into an account and pay it back in one go I think; even if we have to drip feed our money via a standing order when we go to N.Z. Anything but let First Plus have even more of our money. This is a lesson to everyone - a consolidation loan might seem easy - indeed it is deliberately marketed like that - but is just a means for conpanies to make obscene amounts of money out of those who are already struggling. I don't know how Ms Vorderman sleeps at night!! I'll keep you posted on our travails.
  • fatbelly
    fatbelly Posts: 22,188 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    I think this thread is so useful as a warning to others that it deserves to be back on page 1 for a bit longer!!

    The first rule of debt management is - don't convert unsecured debt to secured.

    I think the second should be - don't trust Carol Vordeman
  • james32_uk
    james32_uk Posts: 1,223 Forumite
    Especially not with these ****s!
    Debt as at 12th July 2006 - £61,345 :eek: :eek: :eek:
    Debt free 21st Oct 2011.

    All thanks to :money:
  • rog2
    rog2 Posts: 11,650 Forumite
    10,000 Posts Combo Breaker
    Sounds very much like the situation that Martin was looking for (CAB - lost letter)!!
    If they were collecting from the doorstep they would be loan sharks, preying on the vulnerable, and totally illegal. They are, obviously, running an operation which is legal, but by a hair's breath.
    Perhaps it is worth checking, with a FA, to see if you were in any way mis-sold this loan.
    I am NOT, nor do I profess to be, a Qualified Debt Adviser. I have made MANY mistakes and have OFTEN been the unwitting victim of the the shamefull tactics of the Financial Industry.
    If any of my experiences, or the knowledge that I have gained from those experiences, can help anyone who finds themselves in similar circumstances, then my experiences have not been in vain.

    HMRC Bankruptcy Statistic - 26th October 2006 - 23rd April 2007 BCSC Member No. 7

    DFW Nerd # 166 PROUD TO BE DEALING WITH MY DEBTS
  • Rachman_2
    Rachman_2 Posts: 215 Forumite
    Why is everyone having a go at Firstplus for this.

    This loan was 4 and a bit years ago for someone with impaired credit. Did you expect them to have a rate at 1% above base rate - I do appreciate that the charges are high, but surely if you are about to sign up to a £40K obligation for 15 years, you actually read the damned forms and know what you are getting into ?

    Yes, it's expensive, given who Firstplus were lending to at the time, what should it have been ?

    For those of you who have got mortgages, you know how it works, when you owe more, you pay more interest and it's only in the last few years you really start to see the capital owed fall. Over 15 years it will cost £90K to pay off the £39K. You signed up to it, what's the problem, it's not a particularly excessive rate and you knew the charges (or should have had the common sense to find out what they were before signing up to a 15 year obligation) - now your circumstances have changed, you want out - well that's the whole point, why should someone who took the risk on you when you were less safe as a punt not want to keep the benefit of you now (by having expensive lock ins) ?

    Practically, you want a settlement figure from them and if you are sure you can get better rate credit elsewhere, get it, read the forms to check you can overpay then do it.

    You might also want to think where you could have been without Firstplus taking the chance on you 4 years ago ? Would you have been able to get back to where you are financially ?

    Plus I am not sure you are being too honest about why you needed the money - you indicate the problem was one person losing their income, no, it was having the debt out there that you could not pay off if the worst happened. That's the risk of carrying debt, that you can't service it....
  • I can't believe no-one responded to that last post, but I will.

    Without companies like First Plus, Freedom Finance, Ocean Finance and their ilk, people would be forced to tackle the root of the problem rather than think they have an easy get-out by consolidating it all onto the house.

    So, where would the OP have been without them? Well maybe they'd have ended up on an IVA or DMP, or worse still have gone bankrupt - but it would have been a heck of a lot cheaper for them in the long run and wouldn't have put £30,000 odd into someone else's pocket.

    I'll willingly admit I was foolish and took out a £17k secured loan about a year ago. It was the worst mistake I ever made - to pay it back tomorrow I'd need about £34k.

    People should be educated into knowing how to manage their debts, not encouraged to take on more and not tackle their spending problems... sadly, that doesn't make anyone any money, so that doesn't get advertised on the TV.

    If only there was an MSE advert running every ad break all day on ITV2, eh?

    James
    Total Debt: Owe about £19,000 on credit cards plus £24,000 which is my half of joint loans.
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