Lloyds TSB

goody66_2

I have a loan with LLoyds - which I took out in 2006

The repayments are £149.55 per month, but due to having a few ops in the past few years, I agreed with Lloyds to pay £100 per month, until
I was back on my feet.

They now want me to take out a new loan with them - to cover my 'arrears' - but as I said to them - how can it be arrears, when
it was agreed with them?

I am sill not on my feet - but last payment they took from me was the original amount of £149.55

I am confused

jon_boy75

it is arrears

they only agreed to take a lower amount for a set amount of time, which means the shortfall each month accumulates into arrears

what APR have they offered for the new loan?

goody66_2

Hiya

They have offered me 17.2%

Consumerist

I suspect it's not just the arrears they want you to pay from another loan because your arrears are continuing to accumulate if you do not pay the contractual monthly instalments. It is probable they want you to pay off the old loan completely by taking out a new loan which has monthly instalments you are willing to pay. i.e. £100 per month.

If you want to continue with your current loan, you will need to pay the £149.55 per month under the agreement + enough to pay off your arrears by the end of the original term.

CHR15

Lots of people have fallen into a pitfall by doing this.

If it is early in the loan period, many find that the lower payments do not cover the interest being applied so the amount owed is going UP each month.

david39

- and at 17.2% they will be earning more interest from you than from a loan taken out in 2006

goody66_2

It seems a bit unfair - because they never stated this to me, when they offered me the lower repayments for a while.

I have started to pay the original amount.

Well, I supposed I am going to have to swallow it - and carry on

Thank you for all your comments

Consumerist

Given the interest rate they are proposing on the new loan, I think you are probably doing the right thing in the long run - providing you keep up with the payments.

Because you have accumulated arrears, it might be worth contacting the bank to find out how they want you to deal with them. They might extend the term of the loan until they're paid off or they might want you to increase your monthly instalments so that the loan is paid off at the end of the original term.

I would advise you to confirm in writing whatever they agree so that there are no further unforseen surprises in the future.