Struggling with guarantor loan

prestonlady

Hi all,

I took out a £500 guarantor loan last December with FLM Quick. I know it had high APR but after paying £60-70 per month to them for 9 months and still having a current balance outstanding of £380 I knew something wasn't quite right so I logged into my online account to do some fishing and found that I had TWO credit agreements with FLM, an old one and a new one..

The old one stated under the Repayments section that- These will be the greater of the sum of 1% of the total outstanding balance, plus interest added to your Account in the last Statement Period (see clause 4 of the Terms) or £5.

The new ones states that- These will be the greater of the sum of 1% of the total outstanding balance, plus interest added to your Account in the last Statement Period (see clause 4 of the Terms) or £49.45.

I was in complete shock that my monthly interest had shot up from £5 per month to a whopping £49.45 which explains why the loan just wasn't going down. Thinking surely they can't change my Ts&Cs half way through my agreement with them I did check all my email folders and found the below in my Junk Folder dated the 18/05/12..

As you know we are constantly looking to improve our products and your experience. We’ve got some great news about changes we are making to your account to make sure you can repay your loan quicker and save money. We’re sure you’ll love them.

Have you ever noticed your banks make money when you run out of money? We’ve been customers too and know that when times are tough the last thing you need is another charge to pay. Therefore we are no longer adding charges, so that if times are tough for you, we don’t make them any harder.

No one likes having debts for longer than they need. Therefore, the second change we are making is to change your terms and conditions so that your loan will be repaid within the next 24 months (assuming you continue to pay your monthly payment on the same payment date, do not miss any payments and repay any arrears within the next 30 days). This will mean that your new minimum monthly payment will be the greater of the sum of 1% of the total outstanding balance plus interest or £49.45.

These changes will benefit you but, unfortunately, as it is a change to your terms and conditions we have to give you 30 days notice. A copy of the new terms and conditions that change your minimum monthly payment and no longer include charges will be available online after this notice period.

This change will take effect no earlier than 30 days from the date on this notice. If you are not happy then you are entitled to pay off your loan within those 30 days.

We are also introducing the opportunity for you to increase your monthly payment so that you can clear your debt even quicker. We are calling this ‘slide and save’. Our website will shortly have a facility to show you the amount of interest you could save if you just paid an extra couple of quid each month. You will be surprised at the difference a small change makes.

Don’t forget that you can still make additional one-off payments when you have a bit left over at the end of the month online or by PayPoint.

We have some more great plans that we will let you know about shortly. The next change is that we will allow you to pay your minimum monthly payment by direct debit. Watch out for these further developments.

Regards

FLM Quick Team


Can they REALLY do that? I know I was sent a copy of the changes and it was my fault for missing the email however I took a loan with them in the first place as I was skint so by them saying if I don't like the new terms I can just pay my loan off in full within 30 days (which would have been around £420 in May). If I had £420 lying around I wouldn't have needed a £500 loan with 199% APR in the first place.. It just feels criminal what they're doing. Am I able to challenge this in any way or do I just have to suck it up?

Many thanks in advance,

Ange

wannabee_in_credit

I don't think that they have changed the APR of your loan though - just the amount of the minimum payment.

XXSCOTSLASSXX

wannabee_in_credit wrote: »

I don't think that they have changed the APR of your loan though - just the amount of the minimum payment.

I agree its the minimum payment that has changed not the apr. You say you have been paying £60-£70 per month for the last 9 months am assuming that will be 1% of the outstanding balance ie.. loan of £500 + interest.... if you are only paying this each month it will never clear best to try and pay as much as possible in order to bring the monthly payment down each month with a view to clearing completely.

heartbreak_star

Yep, I have one of these and I got the same email. I have been trying to pay an extra £10-£15 per month off, it doesn't change the interest rate but it is actually making a difference to how quickly I get it paid off - my minimum payment at the start was £53, now it's £40 but I still keep paying the £53 with extra odds and ends during the month.

HBS x