Help Please - Welcome Finance Secured Loan Agreement Advice

yllas71

Hi Folks,

I am new to the forum and wanted to ask some advice about secured loans from Welcome Finance.

My parents took a loan from Welcome Finance in December 2004 for £8000. The loan term was over ten years at 21.8% and secured on the property.

I`m not a financial/legal expert, but there are a number of items on this agreement that concern me after learning that after paying the loan for 6.5 years they still have almost £8000 left to pay to clear the loan. Although I`m in no way an expert, they are causing me to ask is it in fact enforceable under the revised consumer credit act?

1. On the signed loan agreement there is a mortgage endemnity fee of £1,115.00. Are they allowed to charge this given it is secured on the property which has greater 75% equity in it?

2. The agreement does not show the total charge for the credit, i.e. sum of all interest and payments over the term, how much the loan will actually cost when everything is repaid? Does this comply with their statutory obligations at the time?

After making my parents aware of just how much they were being charged for the loan this week when I looked over the paperwork, they would never have taken it had someone explained or showed them just how much it was going to cost. They thought (naively) that the charge was 21.8% of the total amount borrowed (21.8% of £8k plus charges = £9,115) and not the £20,000 in total that they will now have to pay, but surely this should have been explained or outlined as a total figure somewhere?

3. Welcome Finance themselves upped the monthly repayments from what was on the signed agreement - £153.83, to £163.54 in September 2008, without even telling my parents about it.

It says in the agreement they can alter the rate of interest by giving 14 days written notice.

This rise in monthly repayments has only been brought to our attention now after they sent on our loan agreement a few days ago and a covering note about our payment increase which was two and a half years ago on 13/09/2008, so are they then in breach of their agreement?
(It also took 6 months for them to send our loan agreement, after previously telling us twice that they didn't have it).


3. The customer number appears to have been deleted and a new one added on the original agreement. Surely amendments like this cannot be made to a signed agreement? Maybe I am being sinister in my thoughts but could this be something to do with why we were twice told they didn't have our loan agreement, yet we get sent something 6 months later with a new customer number after I threatened a legal challenge?

Apologies for the length of detail, but I'm just hoping someone more experienced might be able to help, or point me in the direction of other info I could access to help verify above.

Thanks in advance for taking the time to read and help me out.

Bryan

[Deleted User]

nope the loan is definately null and void and cant be enforced in any court outside dababaland

they took out a loan 6.5 years ago and only now is anyone questiong if it was a good/right deal? maybe at the time time they were desperate?maybe welcome were the only lenders who would give them a sub prime loan?

masterlumps

just tell them to carry on paying it.......................................................

Apples2

Do you know why they went to Welcome in the first place?

Welcome normally take on high risk applicants who have been rejected from the mainstream lenders. As a result the interest charges are commonly astronimical due to the risk involved.

I wouldn't buy an Apple product for myself as I think they are ridiculously overpriced for what they are, the same logic is applied for a loan with Welcome or a Payday Loan company. Someone buying a such a product has no recourse for refund simply because they realise it is expensive years later.

It is irrelevant how much has been paid at what point, the agreement was over a certain period (in months).
If all payments are made on time, it should finish after the stipulated number of months.

If you are referring to the lack of info on the agrement they have sent to you, it has been agreed through the Courts a reconstituted copy is acceptable (so it doesn't need all the relevent info displayed).

What happened to your parents copy of the agreement?

A customer asking for a loan, and agreeing to such a loan without the detail being explained the the N'th degree by the lender doesn't mean it can be deemeed unenforceable.

If they have sent you a copy of a letter they sent on 13/09/2008, it's a simple enough guess as to what will happen when your parents claim never to have received it (they have a dated copy after all).

The bottom line is they took the money from Welcome and spent it in the way they saw fit at the time, the agreed terms are valid until it has been repaid (including all the interest)

We can all sympathise but the mistake was agreeing to such a loan in the first place, not the terms within it.

ILW

If it is a variable rate loan, how can the lender be expected to put the total interest payable on the agreement?

You are clutching at straws.