Help Required - missold loan?

MidlandsJim

Before I met my wife she took out a loan, which is secured on her house, for the sum of 20k.

The repayments for this are 343 a month.

At the time of taking out the loan my wife was a single mother of two children, working part time for 16-18 hours a week on minimum wage. Her only other incomes were the standard child benefit and tax credits.

To me, it seems quite obvious that the repayment of this loan was not affordable for her, on top of the mortgage (around 280 a month) that she was paying on the council house she had the right to buy.

Struggling to pay this loan back has led to my wife, and me also now we are together get behind with a few other payments.

My main question really is, are loan companies not legally bound to ensure that loan repayments are affordable before the loan is approved?

In this case it seems to me that the company has almost preyed upon a vulnerable single parent, who doesn't really understand finances greatly.

I don't really know the answers to this, we understand that we have no choice but to repay the loan given that it is secured on our home. We have plenty of capital in our home compared to our debts but because we have got behind with a few other things we are unable to get a remortgage which would solve all of our problems due to a poor credit rating.

Any advice greatly appreciated.

Thrugelmir

What was the £20k used for? Consolidating debt?

Apples2

MidlandsJim wrote: »

In this case it seems to me that the company has almost preyed upon a vulnerable single parent, who doesn't really understand finances greatly..

Have you stopped to wonder how this loan came about in the first place?
No bank has ever knocked my door throwing a £20k bundle of cash at me, if ever I have wanted to borrow, I have had to go out of my way to apply for it.

How come your wife has struggled to repay this loan only since she got together with you?

Have you taken over her financial affairs now as you seem to indicate she is not mentally capable of managing money?

Caz3121

Probably more miss-borrowed than miss-sold

As a single morher of 2 working 16 hours ar minimum wage would have given an income from benefits and wages of apprx £1300 per month leaving £1000+ a month after mortgage payments which she and they obviously thought was enough when took the loan

£20k is a large loan. What was the purpose of it? If for other debts then then what were the monthly outgoings for these debts before taking the loan

An adult needs to take some responsibility, they helped your wife out when she went to them to ask for money but they are not there to give financial education to people that do not understand finances.

I cringe when I think back to my financial naivity when I was younger....cards, loans, convincing myself that "wants" were "needs", mortgage extension to pay for holiday. even used credit card cheques they sent through to pay money into my bank account. I have learnt so much from my own stupid mistakes and now have no debt and if I "want" something I save for it. I hate to think how much I paid in interest over those years but in all cases I was the idiot that got me into the mess.

Have a look over at the debt free wannabee board and post up a SOA, the folks there are great at spotting areas to save money which could help you get your finances back on track

_Andy_

Oh !!!!!! why can't adults take some irresponsibility?
The post is embarrassing.

_Andy_

"the company has almost preyed upon a vulnerable single parent,"

Grow up. Seriously.

CKhalvashi

_Andy_ wrote: »

"the company has almost preyed upon a vulnerable single parent,"

Grow up. Seriously.

Sorry OP, I'm on this opinion too.

Every time I've wanted lending, I've had to ask for it, and the bank could either have said yes or no.

It was asked for, bank said yes, and IMO, because it was asked for and not pushed, there's no case here at all.

CK

gb12345

CKhalvashi wrote: »

Sorry OP, I'm on this opinion too.

Same here.

No miss-selling just a borrower who took on more than they could afford.

opinions4u

MidlandsJim wrote: »

Before I met my wife she took out a loan, which is secured on her house, for the sum of 20k.

The repayments for this are 343 a month.

At the time of taking out the loan my wife was a single mother of two children, working part time for 16-18 hours a week on minimum wage. Her only other incomes were the standard child benefit and tax credits.

Did taking the loan reduce outgoings on her other credit by repaying it?

What was the loan for?

Was she getting maintenance payments from the father of her children?

All relevant questions.

To me, it seems quite obvious that the repayment of this loan was not affordable for her, on top of the mortgage (around 280 a month) that she was paying on the council house she had the right to buy.

If that's the case, why did she apply for the loan?

Struggling to pay this loan back has led to my wife, and me also now we are together get behind with a few other payments.

Sell up and rent then.

My main question really is, are loan companies not legally bound to ensure that loan repayments are affordable before the loan is approved?

They are required to assess affordability. But applicants also need to show a degree of honesty and integrity. And once approved they need to demonstrate some financial common sense too.

A loan company can advance money to two separate people with the same income and outgoings. The loan passes an affordability test. But when it comes to the crunch one pays when due, the other struggles.

Was the loan company at fault?

In this case it seems to me that the company has almost preyed upon a vulnerable single parent, who doesn't really understand finances greatly.

This person is old enough to breed. Old enough to buy a house. Old enough to spend £20,000 on something.

Your comment, bolded, is ridiculous.

It's time to start re-prioritising spending.

withabix

I'm waiting for the next thread from the OP entitled:

"Mis-sold a council house"

27col

_Andy_ wrote: »

Oh !!!!!! why can't adults take some irresponsibility?
The post is embarrassing.

I get the gist of your post, but surely you mean "why don't people take some responsibility".
Affordability is a two way street, the borrower knows whether they can afford the loan or not. It's just that they want the money so much that they ignore the facts and convince themselves that they can afford it.