GE Money Loan through Tudor Rose windows extortionate interest

cool4door64

Hi first of all I have seen the posts on here and they have helped me immensely I think its a brilliant site and glad people have the time to share their expertise and experiences to help others. :beer:

Ok now for the boring bit we bought our first house in 2008 since then we have spent alot of money on it one of the most expensive improvements was our windows and doors which all needed replacing we had various companies come and quote us but we eventually chose a company with a good reputation they gave us the pitch which looking back we were pretty naive but we had two children and damp issues so we went ahead. Now looking at our statements for this the amount of credit was £7600 over 10 years beginning 2008/2009 to date we have a balance outstanding of £6,651 we pay £95.78 a month of which £50.05p is interest the interest rate per annum is 8.88% per annum but its states interest is charged on the daily amount outstanding?

It also states that this years we paid £1053,58 or payments of which £474.92 is interest, so pretty much for every £100 we pay £50 is interest!

First of all this was not explained to us when we took out the loan which was through a salesman from tudor rose at our home, in fact i feel none of this was explained in the slightest he made it sounds affordable and suitable for our financial needs, I have been meaning to look into this for ages but as with everything got side tracked by life work a new baby and everything else in between.

Now I feel like we have been mislead alot by the company as it seems the loan is ridiculous in its payment methods or is this just how loans of this amount over this period work? If not and we have been mislead is there anything we can do about this?

We had lots of problems with the windows and doors and still do inc damp and moisture and delayed work while carrying out installation over winter twas a nightmare and now the nightmare continues!

any help or advice would be appreciated

thanks

BoGoF

This is how nearly all loans work.

As the capital sum owing reduces so does the monthly interest you pay so near the end of the loan nearly all of your monthly payment is paying off the loan.

If the APR is 8.8% it's actually a pretty good deal.

cool4door64

BoGoF wrote: »

This is how nearly all loans work.

As the capital sum owing reduces so does the monthly interest you pay so near the end of the loan nearly all of your monthly payment is paying off the loan.

If the APR is 8.8% it's actually a pretty good deal.

Yeah I have just been looking at loan amounts and the apr does seem very reasonable at the moment especially as my credit report is fair as oppose to excellent I am just very distrusting of anyone and any company after being ripped off so many times many thanks for the speedy response cheers:beer:

Tixy

8.8% is a decent APR on a loan of that much over that long. And those figures do stack up to a 8.8% APR.

You may be paying £50 interest a month in the first couple of years, but by the 5th yer that will only be about £35 a month. As said above, that is how loans work, in the early years you owe more so more of your monthly payment goes on interest, as the balance reduces then the interest decreases and more of your payment is paying off the loan.

If you've had problems with the windows & door quality then presumably they came with a guarantee? In which case contact the company that installed them to se if they can rectify the problems.

CLAPTON

just to add

on a loan of 8,000 at 8.8% you would expect to pay interest of approximately £8,000 x 8.8% = 704 in the first year or approximately 704/12 = 58 per month
as you make repayments the capital amount reduces and so the interest reduces
so by years 3 (36 payments) you will owe about 6,200 so the interest will have fallen to 6200 x 8.8% = 545 per year or about 545/12 = 45 per month

the total amount of interest is a reflection of the long period of time you borrowed over as the capital remaining only decreases slowly (a bit like a mortgage)