Fixed Sum Loan Agreement or Not ?

be03993

I have a fixed sum loan agreement with BlackHorse Finance. Minimum duration was 60 months and Total Amount Payable was £12,493.20. So far as I am concerned, I have now made my last payment and the total paid = £12,493.20. All payments made on time, none missed.
BlackHorse are going to charge me with another £51 or so. When I queried this, they say its related to interest on the declining balance and started waffling on that they cannot precisely work out the interest in advance and this is the amount of interest still outstanding on the loan.
So when is a fixed loan not a fixed loan ? My agreement shows the amount of interest payable as £2493.20 on the £10,000 credit. As I have physiccaly paid them a total of £12493.20 surely that must have included the £2493.20 as stated in the loan agreement ?
This sounds like a con to me - Are they entitled to charge extra over and above the Total Loan Payable on an agreement ?
Regards
Pete

SeanG79

Were there any late payments during the 60 months?

All payments should be clearly stated on the agreement...however they wont take late fees etc into consideration

Rafter

Might be something to do with the payment date you selected on the loan too?

£51 looks like about 1/2 a months interest. So if you say took out the loan on the 15th of the month and didn't make your first payment til the 30th of the following month then you could indeed owe them a bit more interest under the terms of your loan agreement.

Personally I think it is unlikely that they would be trying it on and the last thing you want is a default on your credit record over a £51 debt.

Call them and challenge it - ask them to explain exactly which clause under your agreement allows them to levy the additional amount due.

If the answer seems credible then pay the £51, otherwise ask to speak to someone more senior and you might get it waived if you are lucky!

Good luck

R.

be03993

No payments were missed or made late. Everything completely by the book.

The loan was dated 18th April 2008 and the £10k received around 22nd April 2008 with the first loan repayment due 1st June 2008 and then 1st of every month thereafter. But surely they would have taken this into account when setting the figure of interest as being £2493.20 ?
I have spoken to them and I just kept getting told that interest is calculated daily on a reducing balance and that 60 months duration is a 'minimum' period. She seemed to suggest that they cannot work out at the time of making the agreement the exact monthly interest charges incurred against a reducing balance on a monthly basis. I mentioned that I could do that in an Excel spreadsheet as I used to be an accountant to which she replied yes but they are not accountants ! So who works in their finance company then, bricklayers ?

I guess my point is that I have what I consider a legal document that specifies the amount of capital and interest payable under the terms of this 'fixed' loan agreement. Why should I be expected to pay more, even if it is only £51.

I do wonder if they are doing this to all their customers as most will probably pay the £51 simply to be free of the loan without questioning it. Could be earning them a nice tidy sum.
Pete

debtcutter

Rafter wrote: »

Might be something to do with the payment date you selected on the loan too?

£51 looks like about 1/2 a months interest. So if you say took out the loan on the 15th of the month and didn't make your first payment til the 30th of the following month then you could indeed owe them a bit more interest under the terms of your loan agreement.

R.

Agreed - I had this a few years ago.

Basically, I'd borrowed on the 12th of the month, asked for a repayment date of the 28th. They didn't start my payments until the 28th of the following month, so my first month accrued about 16 days more interest than any other month, this then accrues further interest throughout the loan etc.

It's not them trying to screw you, by the sounds of it.

For me, it was actually better that I didn't have my first payment in the same month that I took the loan.