Can a Loan Company change how interest is calculated?

Buzzdarkmonth

I took out a loan where the interest was calculated daily and applied monthly.
After 4 years, and without any notification the loan company changed the loan to a front loaded interest loan.
I only realised this when I checked my credit expert account and saw that the outstanding balance had changed considerably.
My signed agreement does state that the interest is calculated daily and applied monthly.
I have asked the loan company why they have done this and if it is legal but they refuse to answer the question - they just state that it benifits me to calculate the interest this way.
Have tried the financial ombudsmen but they say they can't look at it as the loan was taken out in 2004 which is too long ago for them to look at.

Can anyone assist / shed any light on this?
Any help would be gratefully appreciated

CLAPTON

Buzzdarkmonth wrote: »

I took out a loan where the interest was calculated daily and applied monthly.
After 4 years, and without any notification the loan company changed the loan to a front loaded interest loan.
I only realised this when I checked my credit expert account and saw that the outstanding balance had changed considerably.
My signed agreement does state that the interest is calculated daily and applied monthly.
I have asked the loan company why they have done this and if it is legal but they refuse to answer the question - they just state that it benifits me to calculate the interest this way.
Have tried the financial ombudsmen but they say they can't look at it as the loan was taken out in 2004 which is too long ago for them to look at.

Can anyone assist / shed any light on this?
Any help would be gratefully appreciated

sounds amazingly unlikely

have the momnthly payments changed?
has the APR changed
has the number of payment left to make changed

post up all the detail etc

Buzzdarkmonth

Clapton,

Thanks for your response.
To answer your questions, it's complicated because shortly after taking out the loan I experienced financial difficulties, missed 1 payment and arranged an agreement with the lender to reduce my payments and freeze the interest for a while. This lasted approx 9 months. I have been overpaying now for approx 2 years to try and get back on track.
I have requested statements from the lender on numerous occasions, and they have all been different and contained significant errors. (1 showed the amount of interest being calculated weekly, and added to the loan both weekly and monthly so the interest amount was horrendous, others have shown the 'front loaded interest amount' being added 4 years after the loan started but being added 3 times!)
I therefore have no idea what the APR is, I only know what the balance is according to them.

I'm frustrated that they seem to be able to do what they want and may be ripping me off.

Thanks in advance.