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Loan Advice

I took out a loan with GE Money for a 120 month period agreeing to pay a set figure every month
I found myself in a position to pay the loan off 30 months early, when i asked for a settlement fiqure the amount was over £5000 more than i had calculated.
Upon asking for the reason i was informed that due to the variable interest on the loan, the loan had been extended by another 14 months, adding £8000.
I have cut my losses and paid the amount requested, plus another £500 in various fees.
I have contacted the FSA who told me that because the loan was taken out in 2004 that the loan was unregulated therefore there is nothing they can do.
My questions is..shall i just take it on the chin and put it down to the stupidity of youth..or have i been ripped off and do i have a legal right to challenge the company, if so where do i go other than the FSA. Any (constructive) advice would be gratefully received.

Comments

  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    did your contract specific that the interest rate was variable?
    was there any T&Cs about how the interest rate would vary
    how much did the interest actually varied
  • Thanks for the reply Clapton,
    i paid the same amount every month, the loan was for 120 months, so when i was in the position to pay the amount off 30 months early i expected the amount of the loan to decrease not increase. The standard reply was that as the loan was unregulated, i just don't understand as to how a company could extend an agreed loan repayment by another 14 months. I have been informed by the FSA that i could take the company to court to lodge an offical complaint but i assume that would be expensive.
  • geoffky
    geoffky Posts: 6,835 Forumite
    edited 5 April 2012 at 4:52PM
    Get a judge to agree with you..not as hard as you think.. £30 for court cost
    Why did they increase the term....i would issue a court summons and see if they want to play..
    It is nice to see the value of your house going up'' Why ?
    Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
    If you are planning to upsize the new house will cost more.
    If you are planning to downsize your new house will cost more than it should
    If you are trying to buy your first house its almost impossible.
  • Tixy
    Tixy Posts: 31,455 Forumite
    Hi Polly

    Could you answer Clapton's question? did the loan agreement state that it was a variable APR?

    If it did mention it was variable did the loan agreement detail whether that would increase the monthly payment or the length of the term?

    Did they write to inform you during the loan when the APR changed?
    Did they send annual statements and did those detail or show that the APR had changed?

    Have you now had a full transaction breakdown from the lender to tell you on what dates the APR did change and have you checked that the figure they worked out as owed was correct?
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • The APR was variable, it was linked to the base lending rate. I have received a letter from GE Money today stating the reasons for the increase.
    "As your monthly instalment has not always changed to reflect the fluctuation in GE Money base lending rate, you have not been paying enough to make sure the loan is paid within the agreed term."
    I have looked through my statements and yes the rate did change and my payment was the same every month.
    So I presume that because they failed to administer the loan correctly, I have to pay for their mistake.
This discussion has been closed.
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