Welcome

Bronski2

I took out a loan with "Welcome" a few years ago, part way into the loan i lost my work but for some reason they said the PPI couldn't cover it therefore i fell into arrears. I arranged a reduced payment agreement, started paying it and didn't hear anything more. 4 years later and my balance is still more than the loan, and i now have started receiving arrears statements. Looking closely at one of the statements i noticed not only am i being charged the arrears interest but also something called "capitalisation". When i questioned this i was told it was because i was in arrears and if i wanted to catch up i could. The capitalisation is almost 50% of my monthly payment!!!! Its is calculated it will be another 4 years to pay off the loan by which time i believe i will have paid around 10k for a 2k loan. Surely this is not legal!

Tixy

Welcome loans are generally very expensive even if you keep up with repayments. But once you drop into arrears with a Welcome loan the interest on the arrears rapidly mounts up due to the high APRs they charge.

Are you still paying a reduced payment or are you now paying more? can you afford to increase your repayments now?

If you paid for PPI but it didn't cover you have you looked into whether you could reclaim the PPI? If you were able to that would reduce your current balance.

Bronski2

I am still paying the reduced payment and i am currently waiting to hear about the reclaim of PPI, my main bug is that almost 50% of my payment goes to something called capitalisation, which was never explained when making the reduced payment arrangements agreement!

Tixy

Capitalisation is just their wording for interest I believe.

phil80

As Tixy mentioned above Capitalisation is what welcome use for interest it is front loaded so at the start of your term the interest you pay is alot higher and throughout your term you should see on your statement that the capitalisatiin payment is slowly decreasing each month.