northern rock

brodie_3

Took out an £18,000 loan 3 years ago with northern rock and have been paying up until march when my DMP started. I phone for a settlement figure before I started my DMP and it was £14,500 so that is the amount I thought I would have to pay back. I got a letter saying my balance was £18,125 and that is what I would have to pay them. I pointed out that I had already paid £7,000 approx over 3 years and would they now not stop or lower interest, but they say that the interest is piled on at the start of the plan so I have been paying nothing but interest for 3 years and still owe more than the original £18,000. Is this right? thanks for help.

chevalier

Yes they can front load the interest like this unfortunately. I am not sure what else you can do other than grit your teeth, unless you did not have this explained to you at the time. In which case you could argue you were mis sold the loan. But I don't know whether that would do any good.

sorry to not be more help
chev

danielleindebt

thats shocking that they can do this. surley the fact that you got a settlement figure for 14.5k means that they didnt put all the interest on in the begining?

Donedoingdebt

This seems fairly normal practice. The settlement of 14.5k was assuming that the loan was going to be paid off immediately, therefore gaining a rebate on the interest payment. On entering a DMP, the OP is probably going to go over the original payment period & therefore will have to pay the whole amount.

chani1

do you have ppi on there? also i highly doubt you can claim the loan was mis sold because has front loaded interest as with many companies it will always be in the small print. very unfair but totally legak im afraid.