Is interest still charged on cancelled loan?

zoeyvonne

i yesteday borrowed 400 from a online company and my oh moaned so i called today to cancel the agreement and pay the 400 back but was told i also have to pay the interest?? in the end they halved the interest to £36 but seriously are they in the right to do this?

malkyh

Technically you are settling early so they may charge for that.

Not sure on if they give you a grace period on cancellation. Usually 14 days for most companies.

Assuming this is a payday loan company, they are a law unto themselves.

What company was it?

Cell

Probably, yes.

The terms and conditions will be pretty clear I would have thought?

Otherwise, essentially, they would be handing out interest free loans for a few days and not being paid anything for the administrative work involved.

McKneff

Common sense tells me that yes they do, you did have to money for a short time, obviously there would be some admin to be done, so they have provided a service.

I would just pay up and smile. Look at the APR and then thank your OH for saving you a lot of money in further interest.

Did you really need the money, probably not if you have cancelled it. These online companies are notorious for high interest rates.

zoeyvonne

It was toothfairy and yes i understand it would be silly for them to give me money for free as such but thought i'd be charged by the day?

zoeyvonne

i only needed 100 but the box was ticked on 400 before i started and i missed changing it, my fault i know.

zoeyvonne

the terms does say 14 day cancellation period but interest charged for every day until repayment so i thought i'd pay 1 days worth?

McKneff

So, did you get the loan yesterday and pay it back today, that is 2 days interest...................

Its worked out in days, not in 24 hour periods.

Cell

https://www.toothfairyfinance.com/APR.php

I can't specifically find out the answer from their website, but it seems that you have been charged the full interest for one week of 4 * £9 =£36.

So essentially they charge in one week blocks.

malkyh

£36 for a week? Jesus

Cell

malkyh wrote: »

£36 for a week? Jesus

In no way sticking up for the Payday loans rabble, but if you borrowed £50 off a mate and repaid it a week later and bought him a pint what would the APR be on that £3 pint?