Beneficial finance/HFC Bank

jenjen1985

I took a £2000 loan out with beneficial finance 4 years ago after purchasing a camera from a well known high street store. I was given a card with my loan which was great, untill they decided that I could no longer have a card because beneficial finance was folding. my local branch closed and it is now almost impossible to get hold of anyone regarding my account (unless they want money from me of course).. to the point...

I have been paying the minimum amount with is £61 a month for the past 3 years, (for the first year the payments were very low), so i have paid over £2000 already and only £700 has come of my total, I still owe £1336 on my loan, so going on what I have paid so far it is going to take me over another 3 years to pay the rest of the loan off... my credit rating is not brilliant but it's not bad either, is it worth me ruining my credit rating and stopping the interest on this loan? if anyone can advise me here I would be very greatful as I feel like this loan will never be paid off... I don't have any of my old paperwork so I'm a bit in the dark now

Jen

Tixy

Not exactly sure what you mean about runing your credit rating and stopping interest on the loan?

Do you mean should you default on the agreement in the hope that they will agree to freeze interest? if so its a gamble, they might not decide to freeze interest for starters. They might even decide to take court action against you (perhaps not that likely but certainly possible if you stop paying). Usually creditors will only agree to an interest freeze if they can see the debtor cannot meet the minimum payment but is paying all they can afford.

Can you afford the £61 a month? Could you afford more?

You mention a card and a loan - is this the loan? is the card fully paid?

If you don't have the paperwork it is possible to get a copy of the agreement by sending a written request and a £1 fee. This would then show you all the terms, the APR, the fees and whether you can overpay etc.
Presumably you know how long the loan was taken out over initially? So if you have kept up with the repayments then you will know when its due to finish?

NeverEnough

Beneficial Finance closed their cards about 2 years ago but the business still continues and HFC Bank still operates - the card statements give all the contact details. I had one of their cards and paid it off by snowballing the debt, and paying up the trailing interest, no problem at all. Unfortunately, if you only pay the minimum as you are, it will take years to pay off. I left my direct debit in place and set up a standing order, making weekly payments, even if it was only £10 a week extra, it soon stacked up and the £5K I originally had on the card was paid off far quicker than it would have on the minimum payment.

That's the sad story of credit cards though - the camera has long since become obsolete or lost its glitzy new look, and you have the pain of the interest plus the credit to pay back - however, it seems senseless to default on £1300 and end up being pursued by debt collectors for years, end up with a CCJ and bailiffs terrorising you and a trashed credit rating because you are tired of paying back a credit card that you signed up to and loaned the money on in the first place - try to snowball by making even small extra weekly payments in addition to your £61 payment - there are no penalties and you'll pay it all back far quicker. When its paid back, remember the pain and don't do it again :eek::eek::eek: