Log Book Loans

claden

I just wanted to ask on here if there is anything I can do or do i just have to chalk it down to experience, this is my story.

In October I desperately needed £2,000 I have no family I could borrow it off so i went down the logbook loan route (I know I know but I was desperate). I borrowed the money and have since been paying it back at a rate of £71.74 a week on a 4 weekly basis (as i get paid every 4 weeks).

This month due to a very handy ppi redress I was finally in a position to pay the outstanding amount on the loan (the orginal term was 18 months).

I phoned them up and they gave me a settlement figure of £1877, well you can imagine my surprise as I'd already paid off over the £2,000 I'd borrowed, I questioned the person on the other end of the phone but she had no idea, I didn't have the exact figures on hand before i called them so I paid up.

I then dug out the paperwork, the orginal loan with interest based on an 18 month term was £5,574, I had already paid back £2,000 in 7 months, so add the settlement figure of £1,877 means I paid a whopping £3,877. I phoned them up to get an explanation because they advertise that you won't be penaliesed if you pay the loan off early but those figures definately seem like a punishment to me. Anyway noone on the phone had a clue, finishing the call with "If you contact the Office for fair Trading they'll explain the complicated formula used to work out the settlment figure".

I followed up my phone call with an email but as of yet I've had no reply.

So I'm just wondering if I can do anything else or do I just suck it up, the figures seem crazy to me and the early settlement figure seems way too high.

Tixy

That looks about right -
If the original loan was £2000, £5574 and 18months then its an APR of around 165% or so.

On that basis after 6months the outstanding capital amount would be around £1800, pretty much the figure you have been given. (Only a rough calculation without knowing exactly what the APR is and what payments you have made so far).

paddyrg

So by early repayment, you're not being punished, but saving the difference between £5574 and £3877. Sounds like a benefit of almost £1700?

claden

Tixy wrote: »

That looks about right -
If the original loan was £2000, £5574 and 18months then its an APR of around 165% or so.

On that basis after 6months the outstanding capital amount would be around £1800, pretty much the figure you have been given. (Only a rough calculation without knowing exactly what the APR is and what payments you have made so far).

Ok thanks, it's a pity their employees can't explain things that simply.

claden

paddyrg wrote: »

So by early repayment, you're not being punished, but saving the difference between £5574 and £3877. Sounds like a benefit of almost £1700?

Except the total was with 18 months worth of interest.

dealer_wins

Why do people only think about the cost of loans months after they have taken them out.

It beggers belief sometimes!!

KingElvis

I'd have to be super duper uber desperate befiore I signed for those crazy rates.

Sorry.

mcjordi

pay it off and get rid off it.. is the best advice i can offer..

claden

mcjordi wrote: »

pay it off and get rid off it.. is the best advice i can offer..

It's done and dusted.

claden

I got a letter in reply to my email, they are looking into it and will reply within 14 days.