Halifax high interest loan

froggy75_2

Wondered if anyone could advise me on this. My mum was given a loan by Halifax with 25% apr to be paid over 7 years. At the time of the loan she was 62, a homeowner with no mortgage and retired. Her pension is £595 and her monthly replayments are £294. The loan was to pay off existing debts. She still has three years to go on this loan but it is crippling her finiancially-she literally has to live on half her pension which is impossible so has to rely on help from family. She has put her bungalow up for sale in the past but it is in urgent need of repair so she wouldnt get much for it after paying loan off. She is so stressed it is affecting her physically and emotionally, and she is reduced to sitting in cold becasue she is worried about affording heating bills. Would there be any point in me trying to appeal to Halifax to reduce the loan interest becasue of irresponsible lending???

gb12345

froggy75 wrote: »

Wondered if anyone could advise me on this. My mum was given a loan by Halifax with 25% apr to be paid over 7 years. At the time of the loan she was 62, a homeowner with no mortgage and retired. Her pension is £595 and her monthly replayments are £294. The loan was to pay off existing debts. She still has three years to go on this loan but it is crippling her finiancially-she literally has to live on half her pension which is impossible so has to rely on help from family. She has put her bungalow up for sale in the past but it is in urgent need of repair so she wouldnt get much for it after paying loan off. She is so stressed it is affecting her physically and emotionally, and she is reduced to sitting in cold becasue she is worried about affording heating bills. Would there be any point in me trying to appeal to Halifax to reduce the loan interest becasue of irresponsible lending???

What were the terms of her existing debts (monthly payment and term outstanding at the time she consolidated)?

CLAPTON

could her children not help their mother?

froggy75_2

Have asked my mum about this but she says she cant remember-I do believe her as she has memory has become awful. Its only in the last two years that she has been open about her finances-before this she was really secretive. The loan was for £13000 and from what I can make out at that time she had credit card/store card debt and probably loans to pay off too.

froggy75_2

Oh defintely we have all been helping her, especially me which I dont mind at all but my partner has jost lost his job so money has become very tight.

gb12345

froggy75 wrote: »

Have asked my mum about this but she says she cant remember-I do believe her as she has memory has become awful. Its only in the last two years that she has been open about her finances-before this she was really secretive. The loan was for £13000 and from what I can make out at that time she had credit card/store card debt and probably loans to pay off too.

I am surprised that she was even accepted for a loan on that basis -she "earns" less than £8,000 a year, yet was accepted for a loan of £13,000. Add to that the fact that she was borrowing to consolidate, which means that the lender would normally underwrite based on the old credit and applied for credit (working on the worst case scenario that the old credit would either not be repaid or the borrower would repay the CCs and then max them out again).

The interest rate is sky high, which would indicate that she was seen as a risky borrower.

The only justification that I can see is that her previous mix of loans and cards were costing her more per month than the new loan - but as she can't remember there really is no way of knowing.

There is no way the loan could be secured is there?

If she were to complain and it was found that there was bad advice then the likely outcome is that the loan would be cancelled and both parties would be put back in the position that they were in prior to the loan being taken out. By my guestimate, I would say that she has probably not paid more in interest than the amount she borrowed - so she could end up still owing the Halifax money.

opinions4u

Would there be any point in me trying to appeal to Halifax to reduce the loan interest becasue of irresponsible lending???

No.

Because it seems to me that the borrower is the irresponsible one.

Don't you think?

You could negotiate lower payments with them, trashing the credit file - which might be no bad thing.

froggy75_2

I see her as being vulnerable and desperate when she took the loan out and dont judge her for one minute.

DCFC79

froggy75 wrote: »

I see her as being vulnerable and desperate when she took the loan out and dont judge her for one minute.

No one is judging her, cant see how you have a case for irresponsible lending.

opinions4u

froggy75 wrote: »

I see her as being vulnerable and desperate when she took the loan out and dont judge her for one minute.

You have judged the lender as being irresponsible.

It takes two to tango.

You also stated that "The loan was to pay off existing debts". So I would hazard a guess that either:

a) the Halifax loan reduced monthly outgoings, thus improving Mum's financial position for available income and/or

b) Mum has failed to bring down her expenditure in other areas as much as was needed.

Either way, the debts existed before the current loan.

It's not a lenders responsibility to go through an individual's outgoings line by line. You could do this with Mum using a statement of affairs at https://www.makesenseofcards.co.uk. Complete one and post it on the Debt-free Wannabe forum. I'd expect her to get lots of help there.

She has £595 coming in. Is she getting all the benefits / pension credits she's entitled to? Is the council tax at single person's rate? Could she work a day or two a week? Or get a paper round? - old bloke does our local paper round. Or rent a room out. Take a look at the "up your income" part of the forum.

An extra few pounds a week coming in might make all the difference. Does she have any other pensions to kick in later on? How about cleaning twice a week for a less able person? Lots of infirm people getting DLA who would be happy to hand over a bit of cash for such help.

If she can't afford to maintain her home things will only get worse. So selling up might be the inevitable outcome. What support would she get with housing costs if she rented?

I can see that £300 for council tax, heating and food is cutting it really fine.

What else does she spend on? Is there value in cutting off the landline and replacing it with a £7 a month SIM only mobile contract? Could a few quid be lopped off the buildings insurance premiums? Would servicing her heating systems make them more efficient? Or just heating one room.

What bills can be cut? How could she increase income? Would family shopping with her help to share supermarket BOGOF bargains more effectively?

BugsyBrowne

froggy75 wrote: »

I see her as being vulnerable and desperate when she took the loan out and dont judge her for one minute.

Desperate yes and maybe at 75 years old yes but vulnerable at 62 years old dont talk so stupid.