Ive been had over with a loan I think.

plug1

Well I know I have, I desperatley needed a loan late last year and thought I had a bad credit rating (I didnt) so was pointed in the direction of a broker who could alledgedly sort it out quickly. I went along with them and stopped pying my credit cards etc as I thought this money was about to appear and they would be cleared ASAP.

Well the process was drawn out over 2 MONTHS making me very desperate as the card companies were phoning every day. Halfway through it the brokers said the rates had went up by 2%, I agreed in desperation. They also told me face to face that the only money they made was £185 per deal, I thought this was strange at the time. anyway by the time I went through the final security verification with Nemo finance (the back end lender) I was desperate, only at this point did I hear that £1800 in brokers fees was added to my loan!!! I couldnt say anything there and then as I needed the cash asap. I obviously think this was part of the whole plan.. now when I look at the paper work it does mention this 1800 quid but I was never made aware of it until that final moment.

I feel pretty stupid and Im now paying £210 a month for a 15k loan over 15 years (secured on my house) this is less than what I would have been paying to my cards interest only but Ive been told its very high.

My question, is it high, is there anything I can do regarding the £1800, would I be better remortgaging my house and adding say 5 years to it to pay this off just now... basically what can I/ should I do?

Thanks in advance.

CLAPTON

if you have borrowed 15,000 over 15 years at 210 per month then you will repay 37,800

ask your mortgage provider for a loan to repay the Nemo one

however, if you stopped paying your credit card this may show on your credit records which might make it difficult to borrow.

plug1

Ive done the maths on the huge amount I'll be repaying just wondering if I had ay other options available? Any ideas.

Emmzi

if you are asking "Can I do anything to get that fee back" then the answer is probably no, as you did have a chance to read the documentation before you signed it. (Whether you took up that chance is neither here not there.)

As to whether you can repay the loan, reduce the overall interest to be paid, and switch to a cheaper form of borrowing - that depends. What does your loan agreement say abut early repayment? I will eat my hat if there isn't some kind of penalty or fee built in there.

bigbadandy

Missing a couple of credit card payments shouldn't have too lasting an effect on your credit rating.

You could try re-morgaging since your loan is over 15 years it is not much shorter than a mortgage anyway and probably at a higher rate of interest. Be aware thought that lenders are often not being very generous with their house valuations at present. Also if you current mortgage is tied into interest rates whcih are currently very low a new mortgage will most likely be at a substantially higher rate of interest, on your whole mortgage.

If this Nemo are a bonefide loans company (albeit not their broker is not) then I assume the interest rate you are paying is competitive? If so then you probably won't get much better elsewhere however to find out moneysupermarket.com is good for comparing loan rates. Just enter your details and get instant quotes.

BTW Have you contacted Nemo to let them know that a broker they use is charging these excessive amounts and you are surprise they would want to associate themselves with such an organisation - they may be able to get them to back down with the £1800?

bigbadandy

Of course as the other poster points out you'll need to check about early repayment fees if you swap to another loans company.

plug1

Thanks for all the input so far, I was told that as my loan is secured on my house then the law dictates that I can only be charged the interest accrued so far on my loan plu 2 months interest for an early payment. I seriously hope this is the case. Ive only had the loan in place since january.

JasX

plug1 wrote: »

Thanks for all the input so far, I was told that as my loan is secured on my house then the law dictates that I can only be charged the interest accrued so far on my loan plu 2 months interest for an early payment. I seriously hope this is the case. Ive only had the loan in place since january.

what you were 'told' is really neither here or there, its what the Ts and Cs actually say that applies -go read them

Emmzi

plug1 wrote: »

Thanks for all the input so far, I was told that as my loan is secured on my house then the law dictates that I can only be charged the interest accrued so far on my loan plu 2 months interest for an early payment. I seriously hope this is the case. Ive only had the loan in place since january.

I've never heard of that before. I think I'd need to see the law related to that; I know many hundreds of people on here have had to pay hefty redemption charges.

Hope I am wrong!

Emmzi

ooh actually here's a handy bit of info from Martin. I would still look at your loan agreement tho!

http://www.moneysavingexpert.com/loans/secured-loans

Repaying early?
This can be costly. Secured loans are not flexible and overpaying to clear the debt quicker usually isn't allowed, it's why working out affordable payments is key. If you come into some money and can pay off the whole loan, you should only pay interest for the loan up to that date, not the original loan period – lenders present this as a virtue, it isn't, it's a minimum expectation. However, there are early repayment penalties, so if it's a plausible scenario, examine the following carefully:

• Redemption penalties: These are fines if you try and pay off the loan early. This used to be a major problem as these penalties are stringent, and for many with existing secured loans sadly they're still in force.
  Yet for new loans of less than £25k, redemption penalties are legally restricted to only two months' worth of interest. Larger amounts have no maximum limit however, and penalties can be much heftier. Many loans have settlement figures of up to 6 months interest for the first few years, then on a sliding scale after this.
• 
  Rule of 78: For loans of under £25,000 a potential hidden penalty used to come from ‘rule of 78' interest calculations, a complicated formula which artificially allocates repayments towards interest not capital, leaving more left to repay than you think. Repay very soon after borrowing and it can mean paying back more than you borrowed. Find out more: Rule of 78. Thankfully people taking out loans these days don't have to worry as the government has banned rule of 78 charges, however most people with loans taken out before that will be caught by this.

plug1

Cheers Emmzi, yes thats what Im talking about and I was told that by the broker and Nemo so Im guessing thats OK. Im going to call Nemo now and then my mortgage providers...