Unfair interest charges

tiffs

I took out a loan for £4000 in 1998 and unfortunately shortly after, my marriage broke up. However, I continued to make a payment every month to this company and still do so. Yesterday I received a statement stating that my debt with them is now £24,419 - can this be right - I will never pay this debt off at this rate. Any advice welcome?

paulmapp8306

Unfortunately is could be right. If you havent asked for interest to be frozen/removed - or they refused, then they would be adding this interest on the outstanding amount the whole time. if what you were paying wasnt even meeting the interest then your debt could have grown that much. If you reduced payments without their permission you could also have incurred charges.

when your marriage broke up, did you continue to make the agreed payments to this company, or reduced ones? What was the initial agreement for and what are your current payments?

You almost certainly need to write to them and ask for a breakdown of the account. What the initial figure was, what has been paid, and what charges/interest have been applied. Id also ask them to freeze any interest/charges being applied now. You then need to consult debtline, CCCS or CAB. It may be there is something that can be done to reduce this amount - possibly not (Im not versed with this particular aspect of debt) - however you need to find the facts and quick.

pepe2008

Have you been receiving regular Statements and has the Interest Rate been varied....and have you been notified?

edit! doh!....and send them a request for the Original Agreement . Plenty of Templates available for this, search for 'CCA Request'.
If they haven't got this, or its incorrectly executed, then you could have a get out for a more reasonable settlement.

JimmyTheWig

That's about 15% APR if no repayments had been made.
Almost sounds like, then, that no repayments have been credited!

Was this the first statement you've had since taking out the loan?
How long did you expect the loan to run for?

paulmapp8306

pepe2008 wrote: »

edit! doh!....and send them a request for the Original Agreement . Plenty of Templates available for this, search for 'CCA Request'.
If they haven't got this, or its incorrectly executed, then you could have a get out for a more reasonable settlement.

Forgot to add this bit myself !!

Tixy

Who is the loan with? Is it a subprime lender?

If so and if you've been paying less than the monthly payment then those figures could well be correct.

For people to be able to advise further we'd need to know more about what the original APR was, any changes to it. How much you should have been paying and how much you have been paying.

paulmapp8306

And also if there was any agreement to lower the minimum payment (if you have been paying less) or if there was any agreement to lower or freeze the interest.