Creditor applying interest which is more than my payment!

venus2129_2

I have been with the CCCS for a year now and on a DMP. It has gone well and in many ways taken away the immense stress I was feeling. But, to my absolute horror I have discovered that my Santander loan has risen from 8500 to over 9000 !!! Upon further investigation I discovered that whilst they have accepted the 87 reduced payment they are still applying interest which is causing the balance to rise over a 100 each month!

I contacted the CCCS and asked them for help but they said creditors are entitled to continue applying interest. I feel trapped and I really need some advice. How is this situation beneficial to santander? The debt is increasing and they know I am not in a financial position to pay it off.

Any advice would be gratefully appreciated.

Thank you

Tixy

Hi

All you can do in this type of situation is first try writing to them to ask them to reconsider freezing interest (there is a template letter on national debtline). If that doesn't work you could try writing to ask them to reduce the interest to a lower level so that at least a small amount of capital is repaid each month.

Aside from that you might just need to hope they pass it on to a debt collector soon and that they will agree to freeze interest.