Mistake made by Egg

gabymum

Hi

We took out loan with Egg about 4.5 years ago. Egg allows 3 month payment breaks every year if required and we have taken advantage of this at least twice. However, when doing this, the person on the phone suddenly seemed very confused. After some time he said we had originally been given the wrong payment amounts and that our loan wouldn't be paid off when we expected if these payments continued. He didn't seem sure what to do and we didn't hear anything more from them.

Recently we received an annual statement and our loan (which should finish in Feb 2012) is now due to finish two years later.

We have the originally loan agreement - surely if thats what we signed up to they can't suddenly move the goal posts.

Can any one tell us the legal position.

Thanks

Malky

I dont think Egg have moved the goalposts. You've taken at least 2 payment breaks (how many exactly?) which equates to at least 6 payments plus interest. If you had not taken any payment breaks then I'm sure your loan would be finished next Feb.
How much was the loan for, the APR, monthly payments and term (6 years?)

Also, why didnt you keep chasing Egg to find out exactly what position you would be in? I'm sure I would want to know rather than assume everything was OK.

gabymum

Hi

Thanks for replying

We took 6 months in payment breaks so would have seen 6 months added on end (the payments are put up to take into account the added interest). They have added an extra 2 years onto the loan term.

We didn't chase because the man on the phone said they had made a mistake. He didn't say as a result of that we would have to pay more or for longer.

balmk

What does your agreement say about how taking payment breaks affect the loan term? Interest would continue to accrue during the payment break, plus you then have those payments to catch up on.

The agreement should advise you if the payment amount should increase or the duration of the loan be extended (or both).

gabymum

Hi

It was both - the payment went up and the loan term extended. We just don't see how having a break for 6 months can then equate to 2 years on the end of the loan.

CHR15

You are 6 Months behind in payments, add to that the 6 Months worth of interest you have also not repaid, add the that the additonal interest as your debt has not been reducing for 6 Months.

2 years does sound a lot but I must say I am not at all surprised. Lenders offer these things to make huge profits, not to help the borrower.
No different from the "Loan now, pay nothing for 2 Month" type deals.

They are big earners for the lenders and one which borrowers should fully understand before signing up for.

KingElvis

Yep, those payment "holidays" are designed to trap you and the companies must be laughing.

Looks like they're going to cost you dear.