Lloyds loan, unexpected interest.

missprint

Complete newbie here hoping for some expertise. I have been with Lloyds for years, never banked anywhere else. Have (had) a good relationship with local branch staff. Last year I was coming close to selling my house (C&G mortgage £135,000) for a very good profit (£300,000). I had the chance to buy a rental property overseas and needed £25,000 to complete the deal. I arranged a £25,000 unsecured loan with Lloyds on the understanding I could pay it back as soon as I sold my house. The loan was deferred for four months when payments of £415 would begin. I twice asked the very specific question "how much will it cost me to pay this loan back when I sell my house?" and twice (from two different people) I was told it would cost a proportion of the expected monthly payment, around £250 - £300. I left the £25,000 in my current account while negotiations for the foreign property progressed. In the end I didn't buy that property but continued to explore other options in that location. In the meantime I sold my house and felt smug that I could now pay back the £25,000. Imagine my horror (yes you can see it coming) when I was asked to pay not £25,250 but £25,860. Nobody had thought to mention that 'deferred for four months' did not actually apply to the interest. Yes, in hindsight I was stupid but I really thought I had asked the right questions and I then made decisions based on the information I was given.

I made a complaint but I was told that the information was there in the terms and conditions that I agreed to. I feel that I was unable to make informed decisions and that had I been given the right answers to the questions I asked I would not have left the £25,000 sitting in my current account for nearly four months accumulating interest I was not aware of.

Feel free to take potshots, is this worth making a fuss about?

:undecided

jonesMUFCforever

In my opinion no.
Had you been making monthly repayments straight away then the maximum early settlement fee of £250 would have applied end of story.

Did you really think that a buy now pay later loan was interest free as well as repayment free for first 4 months?

missprint

Yes I did. I thought I had asked the right question you see, so it didn't occur to me to look at it more closely. I was also not familiar with bank-speak, so I trusted bank personnel to give me the information I thought I'd asked for.

brazilianwax

You made £300k and you're haggling over £600???

missprint

No, the house sold for £300,000, I still had to pay off the first morgtage of £135,000 and also buy another house. And £600 is not an insignificant amount of money to just throw away.

jonesMUFCforever

Did they also give you a copy of the CCA agreement?
Did you not think that it would have been wise to read it.

Tustastic

Missprint, you wrote that the loan was deferred - but it was not. The loan started when it arrived in your bank account. The payments were deferred, at your request. A loan is a sum of money on which you have to pay interest, and you have paid interest, end of story.
I am sympathetic to the fact that you are not clued up about money, but hopefully in future you will not start moving large sums of money around without reading the terms and conditions. If you don't understand the terms and conditions of any future agreement, then you must not sign up to it.
Glad you found your dream home eventually.

missprint

Yes, of course I realised interest would be charged but I thought it would be deferred for the four months, and I thought I had clarified this by asking the question. I can remember a situation years ago when a £1600 debt with Lloyds was left interest free for several months while I was abroad, so it wasn't unprecedented.

missprint

You are all right of course, but I'm not as !!!!less as I obviously sound. I have done a lot of research in the last few weeks and I'm a bit more familiar with the workings of money-handling now. The fact is that it is only with the sale of my house last year that I actually had any money to handle, if all your energies go into making payments on debts there is little incentive to be knowledgeable about what to do with extra money. Also it is not my dream house but a downsize to release the equity built up in my previous property.