Girlfriend has loan but is now on maternity leave

immoral_angeluk

wheelerc wrote: »

Hi,

My girlfriend took out a loan from Natwest for £5,000 before we met (to pay for a car and driving lessons so she could get to work).

The loan was taken out at a rate of just over 18% over a period of 5 years... which means that once she has finished paying back the loan she will have paid back over £10,000.

Her monthly repayments are approx £174 over 60 months, and she has around 4200 left to pay.

While she was working the payments each month were not a problem, however she went on maternity leave last august for our Son who was born in October and is not due to return to work until May.

As she is only receiving SMP which is around £500 per month, the £174 repayments are taking quite a chunk of her income, and while I'm working and we can afford most things we need, she's upset that she can't contribute very much towards rent/bills etc.

Is there anything we can do about this loan? In my mind the fact Natwest lent her £5000 over 5 years at 18% is near criminal, as she will be paying back more in interest than she borrowed in the first place, and has already repaid £5,800 with two years left on the loan.

To make matters worse, at the same time as selling her the loan, Natwest set her up with an ISA account with monthly payments of £30 going into it, as well as signing her up for an 'Advantage Gold' account with a monthly fee (which she has since cancelled). Surely that's poor financial advice as the £30 per month would have been better used on paying off the loan at a faster rate?

I can take out a loan in my name for the remaining £4200 at a lower interest rate and use that to pay her loan off, but I was wondering if there are any other ways to deal with this, perhaps negotiate with Natwest, or is there a case for the original loan being mis-sold?

Are you not able to help her temporarily? If she defaults by making lower than contractual payments it will damage her (and likely yours if you're financially linked) credit rating.

rs65

wheelerc wrote: »

Hi All,
We received a letter a few days ago from RBS's PPI department stating that they would be offering us a full refund on the PPI charge

So does that mean that the total payable of over £10k included PPI? Was the interest lower than you thought and it was actually the PPI and not the loan that was mis-sold?

wheelerc

rs65 - Yes, originally I didn't realise the 10k included the PPI (she genuinely didn't realise she had PPI either) so we thought the repayment was just interest, which is why I though the interest was unfairly high, it wasn't until we paid the outstanding amount off and got back a breakdown of the charges we realised she was paying PPI, charged up front and added to the loan amount...