Interest on a Loan taken out approx 7 years ago

spangieuk

I took a loan out with Egg about 7 years or so for 10k and am still paying for it now. I am trying to get debt free and have been for some 18 months now - and things are definately better and I can kind of see light at the end of the tunnel - (Was 27k in debt and now 11k).

As per Martins (and everyone elses help) I have been paying things off with highest interest first etc etc - and tarting as much as possible (although I might have reached the end of the road on that one!!) - but this Egg loan has a rate of 7.7% - which, whilst I understand is cheap for the current climate (and a low'ish credit rating) - no matter what I do - if I over pay on it - there are no benefits - I am still going to pay the same amount as the interest was calculated and put onto the loan at the beginning (if that makes sense) - so I have been working at reducing others so that when the time comes to have to tart again, the balance is lower.

What I want to do is get rid of this egg loan as it is a large payment each month. Someone has mentioned that I can claim back something on this but I cant find any details - mis-selling maybe or unfair loan? I have already claimed back PPI - but am wondering if there is more that I can do?

I would be most grateful for anyone that can help - or if this is just not the case and I have to pay the whole lot regardless?

Thanks very much for you help.

CLAPTON

No it's most unlikely that you were sold an unfair loan. ( if there is such a thing)
However 7.7% is a good rate and surely after 7 years you must be fairly near the end of the loan anyway... what were the loan details?

CHR15

What is forming the basis of your opinion it has been mis-sold??

Sounds like you got a good rate and a good deal.

spangieuk

My thoughts around it being unfair is that the was originally for 10k, the interest was calculated (7 years ago) and added to the loan.

So repaying early makes no sense as if I pay the loan back in 2 years it is nearly 14k and if I pay it back in 10 years its still nearly 14k. I am paying for interest for a period of time that effectively I wouldn't have borrowed the money over as it was simply added to the original loan in the beginning.

The loan is now about 2.5k or something outstanding - Due for completed repayment is mid 2012 - and obviously if I can reduce any outstanding amount in any way, for me just means I am closer to my goal of being debt free as I can use that money to pay something else instead.

That is the part that I am trying to clarify.

CLAPTON

spangieuk wrote: »

My thoughts around it being unfair is that the was originally for 10k, the interest was calculated (7 years ago) and added to the loan.

So repaying early makes no sense as if I pay the loan back in 2 years it is nearly 14k and if I pay it back in 10 years its still nearly 14k. I am paying for interest for a period of time that effectively I wouldn't have borrowed the money over as it was simply added to the original loan in the beginning.

The loan is now about 2.5k or something outstanding - Due for completed repayment is mid 2012 - and obviously if I can reduce any outstanding amount in any way, for me just means I am closer to my goal of being debt free as I can use that money to pay something else instead.

That is the part that I am trying to clarify.

why do you say that all the interest was added on at the beginning?

what was the monthly payment?
how many payments have you made
have you asked for a settlement figure

fozmcfc

Do you not use Egg online service?

On the online service it should show you the amount of the loan, how long is remaining and you can ask for a settlement figure, which is calculated there and then, no letter, but straight on your screen.

You might be surprised I was, I owed £700 and was due to finish in 3 months time. My settlement figure was about £450, so you might be surprised.

As for the overall post, you seem to be being responsible in clearing your debt, so I would suggest you continue to act responsibly and basically pay what you agreed to.

Not sure how suddenly after 7 years, you can actually justify yourself by saying you think it was mis-sold. Laughable to be honest.

dave82_2

This doesn't sound right that you can pay it back as quickly or as slowly as you like. Surely they hve agreed a term with you and if you exit early you must pay back the interest they would have earnt during this term.

Otherwise just pay it back over 100 years if the interest doesn't change!