Halifax gave me a payment holiday I didn't ask for!

dogwithabone123

I recently took out a personal loan with the Halifax. I was told that payment would be taken out 3 months from the loan date. Great I thought, that gives me some breathing space. Then I get my account statement and see that I have been charged interest for those months before payments were taken. I wrote to their customer relations asking why, they replied saying that under the account terms interest would be charged from the moment the loan was agreed! They were also kind enough to send me my signed paperwork when I took the loan out which stated - YOU MUST PAY THE LOAN, ARRANGEMENT FEE AND INTEREST BY *** MONTHLY INSTALMENTS STARTING 3 MONTHS AFTER THE DATE ON WHICH THE LOAN IS MADE. They said I had a payment holiday? Nowhere in the documents I was given say anything about this, I wasn't offered this and I didn't ask for this. I've replied saying the same, asking if they can provide evidence that I was given this option or asked for it. Can they do this? Seems like a scam to me?:(

CapJ

dogwithabone123 wrote: »

I recently took out a personal loan with the Halifax. I was told that payment would be taken out 3 months from the loan date. Great I thought, that gives me some breathing space. Then I get my account statement and see that I have been charged interest for those months before payments were taken. I wrote to their customer relations asking why, they replied saying that under the account terms interest would be charged from the moment the loan was agreed! They were also kind enough to send me my signed paperwork when I took the loan out which stated - YOU MUST PAY THE LOAN, ARRANGEMENT FEE AND INTEREST BY *** MONTHLY INSTALMENTS STARTING 3 MONTHS AFTER THE DATE ON WHICH THE LOAN IS MADE. They said I had a payment holiday? Nowhere in the documents I was given say anything about this, I wasn't offered this and I didn't ask for this. I've replied saying the same, asking if they can provide evidence that I was given this option or asked for it. Can they do this? Seems like a scam to me?:(

I don't understand what the problem is.

Did you expect them to lend you the money for free for 3 months? They are a commercial organisation. They will charge interest for the whole duration of the loan.

Because this was agreed at the outset it isn't really a payment holiday. This should mean it is already in the interest you agreed to pay. In which case, no problem right? You are paying the same amount over the same time as you thought you were.

Neilhmtn

It's not a scam if they didn't tell you those first three months were interest-free.

PNPSUKNET

its been about for ages with the 3 months ,

husemin

...Surely if you did not get the 3 months holiday, you would finish the loan off 3 months earlier and therefore save the interest, right all!

H

Rafter

As others have commented, this has been a standard feature of Halifax personal loans for years.

Although you make no payments for the first 3 months, interest is added, but that interest is factored into the APR calculation for comparision purposes.

At the end of the 3 months, you will owe more than you originally borrowed, but over the life of the loan you will make the same interest payments as a loan with the same APR but without the 3 months payment free feature at the front end.

No scam - I'm sure the loan documentation makes very clear what the APR is, when your payments start and end and the total amount payable.

R>

dogwithabone123

Thanks for all your replies - however I was told when I took the loan out that payments would start three months from that date - the advisor said that this was because of the way the system was set up. No one mentioned a payment holiday? And the paperwork I was given states that interest, any arrangement fee and payments would start 3 months from the date the loan started. Dont you think this is misleading? When I recently wrote and queried this, the paperwork they sent had no mention of a payment holiday. If I had been given the chance to start payment from the start I would have done?

Isn't there a paragraph in the banking code that says they need to explain everything clearly to the customer before organising or confirming agreements?

I'm not daft, just confused!:o

dogwithabone123

Thing was, I wasn't told it was a holiday, just that this was the way their systems were set up?

Azrael_1701

dogwithabone123 wrote: »

Isn't there a paragraph in the banking code that says they need to explain everything clearly to the customer before organising or confirming agreements?

Irrespective of this, did you not read the T&C before you signed?