Still Paying Flexible Loan After 9 Years

Trodac

Hi,

I feel bad having just registered but really need advice as I am feeling at a loss and trapped.

9 years ago I took a flexible loan at 7.9% for 3000 which I increased to 5000 a year later to pay off my credit cards. This was with internet bank Cahoot who are run by Abbey National and now Santander. They applied payment protection although I was adament I didnt request it however that is not the point. Over the years they have upped the interest rate gradually to 20% notifying me of the changes I admit but when I complained they stated they could due to the flexible nature of the loan. Anyway after nine years paying back £140 a month I continue to owe 5200 (more than I borrowed) which they are taking at 140 a month with £80 a month being just interest. Frankly I am totally fed up with this millstone around my neck and feel totally at a loss at how I ended up in this position at this rate it will be another 5 years to pay off totalling over £20,000. The bank have been no help in concluding my complaint stating they have nothing to answer to and I am legally obliged to complete at this rate.

Any advice would be greatly appreciated

Thanks

Consumerist

Hi Trodac and welcome to the MSE forum. Don't feel bad - this is what the forum is for.

There are options to explore once a bit more is known about the loan and your financial situation.

Could you tell us more about what flexibilty is available on the loan. e.g. how are your repayments decided and can you vary them?

If you have a good credit record, some of the debt might be transferrable to a 0% card for a year or more. At the interest rate you are paying you would be no worse off with the debt on credit cards, anyway.

wacko911

Trodac, see my avatar pic!!! I took out a 'flexiable loan' with cahoot after much research at the low rate of 6.9 or 7.9% for about 9k. They upped the rate by 2-3% every month till it reached about ~20%. At the time they were getting out of the flexi loan market and those who could afford to move did (putting the rate up was to encourge this), however others like me who had just taken out a large loan were stuck! I paid mine off in 9 months (of scrimping hard) and closed my accounts as it was really a low move by Cahoot. Bait and switch springs to mind.

For those not farmilar with this type of loan, there was no fixed term you were given a credit limit which you could withdraw as cash and could pay back as much or as little as you like (had to pay back at least the minimum (eg 3%) every month). You could also borrow more at any time. Bit like a credit card only it was a cash account.

paddyrg

That's horrible! Do you have access to any cash you can put against it? Have you tried talking to other lenders? Would Zopa be any help if you've got a clean record? You are totally right wanting to get out of your abusive relationship with Santander!

Trodac

Thanks for replies, exactly as wacko911 states in his post is the situation I am in. In response to Consumerist's post the repayments were basically like paying at least a minimum amount on a credit card but you could set it higher which I thought I did and indeed vary them as long as minimum was paid each month. My credit rating is ok, I have missed a credit card payment around 4 years ago, currently have around 7k on credit cards which are on 0% and bouncing them around when 0% term is up (but they keep putting the credit limits up, currently altogether I have 17k credit limit but am determined to clear this debt and have stopped using them for over a year). A have a 4 year loan for my car of 6K which finishes in June funnily enough with Santander now but taken out with Nationwide. When I write things down like this I realise what a mess I am in, whereas I recognise I could probably transfer this Cahoot debt elsewhere there is a big part of me feeling that enough is enough I have paid this debt twice over. If I knew this could happen I would never have taken it out, who would though I suppose, it feels as though I have been tricked.

ILW

You took out the loan to repay debts and then ran up another £7000 on credit cards whilst paying barely minimum payment on the loan. You need to address your spending or it will not get any better.

Consumerist

In thruth, Trodac, I think you should copy this post over to the Debt-free Wannabe forum where there are many people in a similar situation and others who have been there and come out the other side.

You may want to read of the Debt Problems page then post more details of your financial circumstances. A good start is to draw up a realistic budget and post a Statement of Affairs if you want a critical appraisal.

molerat

Have you got any available balance on any of the 0% cards which you can SBT to and if so what is the apr once the offer is finished. This could give you a breathing space but what are your plans for when the offer periods finish ?

KingElvis

My ex got into trouble with one of these "flexi" loan accounts, they were a relic of the spend spend spend days and the most flexikle thing was the massive interest they piled on.

I really hope you find a way out, the DFW board is your best bet.

CHR15

There is a wealth of info regarding this Cahoot Flexible rip off. A quick search for Cahoot in the Loan forum will find the results.

Basically, as others have said, the only way out is to transfer this debt elsewhere, great if that is possible but in a lot of cases, simply not so.

Halifax (a member on MSE) has been chasing Firstplus interest charges which are of a similar nature, look for the Firstplus complaints for info too.

Simply put, there is no easy way out so it's the hard slog. Pop into the DFW board and post your SOA. The more seriously you heed the advice, the more likely you have of seeing some light.

Good luck.

Trodac

Thanks for your replies, I didn't realise how many others are in the same boat and take some comfort from the fact I wasnt the only one caught out, however looking at the other threads it does seem that there is no comeback for them and I will have to put this down to another one of life's bad decisions. I may try and claim back my PPI though as some small comfort. Thanks again good to know there are still some decent helpful people around.