help with secured loan from equifinance

mrcraigyd

he has decided not to go ahead with it now THANK GOD

Apples2

Has has signed up for an £11k loan at a MASSIVE interest rate, of course he is being scammed. A variable interest rate means it will be going up anyway so the misery will continue.

How did any of you let this guy sign that form?

Are you positive you signed as a witness and not as a guarantor? What details did you have to supply?

Stupid_Question

mrcraigyd wrote: »

hi there was wodering if someone could help shed some light on a loan that a friend has taken out from equifinance... it is a secured loan which i have signed as a witness to his and his partners signatures and as i talked about it with him i couldnt seem to work out how they have worked his monthly payment out so was hoping somebody on here might be able to help from the details below..

Amount of credit ; £11,000
Monthly Payment ; £263.50
Duration of Agreement ; 180 months and one day
APR ; 32.29%
Annual Interest Rate (variable) 26.08%

Total charge for credit
(a) Interest ; £34,335
(b) Debtors Broker Fee ; £1100
(c) Lenders Legal Fee ; £995
Total ; £36,430

I have tried several loan calculators and cant seem to match the £263.50 per month they state for him. After telling him he is now worried that he is being scammed in some sort of way?

Im due to see him later today so was hoping somebody could give explanation of the above information.. thanks

£263.50 x 180 = £47430

Where's the confusion?

CLAPTON

if he has a cooling off period he should cancel immediately

this is a shocking loan

DCFC79

That's very bad interest, am I reading it right he's borrowing 11k and will or could ( if it was taken out ) pay back 4 times as much ?

iolanthe07

That is a ruinously high interest rate for a secured loan. What was your friend thinking to agree to such terms? Didn't anyone try to stop him? If it is a variable rate it is sure to go up over time - they almost always do. For heaven's sake, get him to cancel it if he possibly can.

Apples2

That's correct, he is swapping nearly £50,000 of his own money for just £11,000 of theirs.

This is the early stages of all those posts on here about loans being mis-sold.
This is the point where we try to convince the borrower not to proceed.

All to often the advice is ignored as the loan "really is the only option!!" Sad but it happens.

Daedalus

Apples2 wrote: »

That's correct, he is swapping nearly £50,000 of his own money for just £11,000 of theirs.

This is the early stages of all those posts on here about loans being mis-sold.
This is the point where we try to convince the borrower not to proceed.

All to often the advice is ignored as the loan "really is the only option!!" Sad but it happens.

This is not being mis-sold, that term is banded around as if it is interchangeable for 'bad value'. There is nothing unlawful about a bad deal in itself. The charges and interest are clearly labelled on this loan, if someone of sound mind is foolish enough to take the loan they can't and shouldn't be allowed to get of it just because they have buyers remorse, outside of statutory cooling off period.

mrcraigyd

thanks for the replies people, we have realised now its the 30+ k interest over the term on top pf the 11k thats makes his payment what it is.. i have tried to convince him not to take it but he states he has been told he can settle early with only a months interest payable? does this sound right? he is due a sizeable inheritance and thinks he can settle this loan when he gets it.. to be honest i should of read the loan agreement before i signed his witness form.. if the variable rate goes up how much would that effect his payments? he says hes tried everywhere for a loan and has been declined after decline due to several defaults and missed payments.. ive told him i wouldnt of signed as his witness if id known hes said he would of just got someone else to do it! also apparently they do a drive by valuation on his property, what does that mean?

Apples2

I think you missed my point, people claim it was mis-sold only when the repayments dawn on them.

When applying they think it is a great offer even though the charges are clear.

somethingcorporate

He will be able to settle early but it doesn't mean he is not getting an absolutely ridiculously poor value deal.

Is a remortgage not an option?