Extortionate Loan!

nrsql

The agreement was for 240 payments which I guess is 20 years not 5.
The total to be paid was £32,625 (@33%)

From the statement they have paid £26,043.61 so they shouldn't have cleared the debt even without missed payments.
I'm guessing the increased payment of £190 is to pay off the loan at the initial date in 2010.
The statement is very odd. Saying no payment is due and negative arrears.
Notice that the total due is increaing by £99.60 each month. I wonder if the payment is being made out of step with the payment date (i.e. payment was misssed so all payments are a month late) and there is a £99.60 penalty being applied every month. The value doesn't change so it doesn't look like interest. If that's the case I suspect you can claim a lot back.
The arrears is just the paid minus the total due.

It looks like there is something missing from this part of the statement.
Is the settlement figure calculated by the amount that would be paid if the loan went to term? i.e there is £52k that would be paid?

It could be that the £96.60 is interest and it's not changing because they aren't applying any payments to the debt but increasing the arrears account. That would mean that the outstanding amount was about £3640 but I don't see how they get to the settlement figure if that's the case.
Could be that the term has been extended beyond 2010?

Suspect this company has stopped trading and is just picking up loan payments or maybe another company is doing the selling (maybe to protect this company from dodgy selling cases?).

Anyway CAB looks like a good bet. Would be interesting to see what a judge thought of this.
£5k loan - pay back £80k

nrsql

Having another look this might not be the loan account but just calculating arrears and penalties and such. That would mean that your parents have paid nearly £20 above the original expected amount and it is increasing by £99.60 every month.
If that is the case I would expect you to have another statement about the loan to which is credited the arrears amount from this statement.

The settlement figure is very close to the original amount payable plus the total due on this statement so I wonder if they haven't subtracted the payments which would make the settlement figure about £26k.

Little_Miss_Winner

This is absolutely horrendous!

I'm afraid i don't know enough to help you out on this one, a trip to the CAB would be your first stop.

Bumping this for anyone more knowledgeable to have a look at.....

Bump..

tyllwyd

Beebe wrote:

Thanks for your reply.

There is no clear inclusion of court fees, its not very clear at all really. Do you have any idea if there is a term for the sort of consulation they would need? A certain type of solicitor?

I was looking here
http://www.compactlaw.co.uk/free_legal_information/consumer_law/consumf4.html
and at point (d) it talks about unfair credit agreements. I have no idea if this is still the current law, and no idea if your parents would be protected under this legislation, but it is certainly worth asking the question to someone who does know. I would have thought a high street solicitor ought to be able to at least give you a first opinion.


Is your parents credit rating shot to pieces - is there any chance of them raising a mortgage at a sensible rate to pay these people off?

Beebe

They are currently looking into the remorgage option to see if that would help them.

Many thanks for all the help, they r going up the CAB this week and I will let you all know the outcome

Eupho

Beebe wrote:

To follow this up i now have the agreement....

Total Amount of Credit to be provided: £5625
240 payments of: £135.93
Lenders annual interest rate of 33%

The charge for credit is £27,000

Total amount payable: £32,625

Bl@@dy hell!! what a RIPOFF.. Your poor parents.. all that time and all that money.. for a mingey 5000G
:mad:

BONJOEY

i feel for your parents, what a nightmare, you will get help!

bump....

liz105

I remember seeing something in the press a year or so ago about a couple (same thing, £5k for home improvements in the late 80's/90s) with charges and late payments early on they owed something in the 6 figures range! (when it gets that high its all the same)

It was in all the papers at the time, I believe they were going to lose their house and the judge wrote the loan off completely.

Have a look through newspaper archives online to see if you can find anything on the story or similar.....perhaps this is more common than we think?

mumof30_3

I, along with my brother and sister have just discovered how much debt my mum is in. She is 73 and owes about £20,000. This has only been over the last 2 years. She is devastated it has got out of control. She always told us to make sure we paid any debts ontime and not get a bad credit rating. She was in tears telling me at the weekend. I had told her at the beginning of the year that I would get her sorted out with cheaper phone, gas, electricity, house/contents insurance and that my brother would look at the best deal for 0% balance transer on her credit cards. It has all got too much for her and she had to tell us.

Her story is:
she originally had a loan for £7500 on 7.9% over 7 years, this taken out in 2004. She had paid off her mortgage and this for home improvments i.e. gas central heating and double glazing. As far as we know she was paying this on time, but running up a credit card also. Anyway, July 2006 she was in the bak(Lloyds TSB) paying a bill and the assistant never gave her a receipt. When mum asked where her receipt was, the asst said "oh you'll get it down at the end". Mum toddles off the get her receipt where another bank member is waiting and says"come in and have a word with me, I'll save you £100 per month" Mum tells him she is not feeling well and just wants her receipt. He insists she goes in and stupidly she does. He tells her he can save her £100 per month. She says "I don't want you to touch my loan as I got a really good rate". He argues with her that lloyds TSB would never have given her such a rate. She tells him "I am not feeling well, give me any paperwork to take home for family to look at". He tells her she can't take it out of the office without signing. Yes, you guessed it she signed. Now we have discovered the rate is 16.9% and her original rate was 7.9%. My mum is a pensioner and the loan he signed her up for was £12,000. On the money she has coming in, she should not have been given that money. My brother has done loan application online with Lloyds TSb using all my mums details and it comes back "you cannot meet the re-payments, contact your bank" She was never asked what her income was when dealing with this man at the bank. She also continued to run up £6000 on another credit card(cap one), well thats what she says it is called. She fell behind with payments for about £350since November and they are refusing to take help her out with smaller monthly payments and have sent her bankruptcy forms, which thankfully she has binned. My brother is an accountant has taken control of the situation. We don't know if we will get a remortage on her house to pay off her debts.

Any advice on how to help her out, will be greatly appreciated. She has written off a lettr of complaint to the Lloyds TSB head office.

She is sitting crying most days saying how stupid she is and that in all her 73 years, she has never been in bad debt. She says she doesn't want to take any omney from us, but as I have said" she brought up us single handed over the las 35 years and now it is our turn to help her". At the end of the day her house will be ours when she dies(not for a long time, I hope). Houses in her street are selling for £80,000. Over the last 2 years she has had a lot to worry about, my other brother was diagnosed with cancer and passed away the week before Christmas 2006. She explained to the credit card company that the arrears were due to being away to be with her son who was dying. Made no difference to them.

Thank you for listening and reading this far.

BONJOEY

oww bless , well done on posting here, you will get the help you need, there are lot of people on here who have good advice,

did your mom pay payment protection on her loan, or cc? did she work or wa retired?

have you been into the bank with her to discuss this matter with the mananger?