Paying off a Logbook Loan?

CruisNIg

I took one of these nasty things as a last resort when had to move house in a couple of days, knowing I would have money to pay back quite soon after. This was in August for £1530. I have kept payments up to date and now(at least I thought) have money to pay it off. On ringing for a settlement figure I was told it was 1800 - after paying 600 towards it. From what she explained, my payments only covered interest each week, plus had past 2 weeks to pay plus a months additional interest at £56 a week.


I really want to get rid of this off my plate, and only have about 1200 which I thought would be better to pay off it now and therefore the interest wouldn''t be so steep each week and make the sum grow more astronomical.

She then told me the interest each week would be the same as it is calculated at the start- and I said surely if I pay 1200 off you cant charge interest on that? She said 1200 would be took as advance payment and they only take a weekly amount out of "advance payment pot".


Please can anyone offer advice, I took this as a short term emergency and either want to get rid of it somehow or pay towards it to a meaningful reason. If I put my 1200 towards it now it will leave 600 with an additional 56 quid added every week. I'm in two minds now whether to just give up paying and see what happens since I am in northern ireland - I don't know.

KingElvis

Yep, these things are a terrible trap and use arcane old rules. It's basically a trap to keep you in debt.

I would raise the cash through any means possible to pay them off in total. Can you get any other form of credit? I take it a decent credit card or regular loan is not available to you?

Good luck.

JasX

No that structure of loan does exist and there is a whole MSE section on it here:

http://www.moneysavingexpert.com/loans/flat-rate-loan-danger

CruisNIg

Unfortunately I have no guaranteed income so my bank doesnt offer credit.

I had used logbook before for a 3 week period and was no problem, but didn't really take in how extreme interest cna be to the point of being asked to pay 2400 in total for a 1530 loan after 3 months

CruisNIg

I never realised that a flat rate loan existed until now unfortunately, I planned to pay it off completely or at least make a big dent in it soon after I took it out in order to minimise interest. Clearly flat rate fool is a mild expression in this case.

geoffky

christ...i wish you well getting this off your back.....never again,,,,