Was my loan missold?

Anonymous_m

I got a loan from Halifax because I had been with them for about a decade and I had no credit history. I borrowed £8,000 at 27.9% in October 2010.

When I applied for the loan I was told that I could see details on the loan on the online banking, I could pay off the loan early or additional payments at anytime so I chose it for the longest time (7 years) with the plan to pay it off early and I was also told I could change it from 7 years to an earlier time.

It said on the online banking previously there is a loan but no amounts or details but now it doesn’t mention the loan. When I have been in the branch I have only been told the total that would be paid at the end of the full loan term and that I can’t pay extra each month or change it from 7 years to less than 7 years.

When I asked how much is remaining in February 2013 I was told that the outstanding amount on the £8,000 loan was £12,417.14 which is £4,417.14 more than I borrowed. I asked about complaining but Halifax haven't done anything, I even emailed the banking adviser with no reply

Have I been missold the loan? or is there a way I can complain to a higher authority?

happycamel_2

Have you got the terms and conditions you signed up to in the original credit agreement? Unless one of them has been broken it seems unlikely you have been miss sold the loan but rather that you no longer like the terms you agreed to when you applied for and spent the money.

jonesMUFCforever

They were right you can change the loan - you need to apply to a new lender and then you can pay it off.
It looks like your credit rating is worse than when you took out the loan (only you can say if this right) and this is why no new offers of a loan are appearing now on your internet banking.
Once a loan is opened neither you or the bank can change the terms you are protected under the CCA.
In fact a quick look at the Halifax loans webpage makes it very clear you can overpay any amounts at any time without charge (there is an early settlement charge if you settle the whole loan early).

I do not see that there has been any missale here, only possibly a misunderstanding on your part of the terms and conditions you signed up for.

cos_2

27.9% is a huge rate. I think you owe what they say, I'm afraid. I assume you agreed to the rate.

ERICS_MUM

mis-sold ? don't think so.

Mis-bought ? probably

opinions4u

Anonymous_m wrote: »

I got a loan from Halifax because I had been with them for about a decade and I had no credit history. I borrowed £8,000 at 27.9% in October 2010.

The loan agreement has a total amount payable on it including interest. It will be a number between £16,500 and £17,000. Am I right?

When I applied for the loan I was told that I could pay off the loan early or additional payments at anytime so I chose it for the longest time (7 years) with the plan to pay it off early and I was also told I could change it from 7 years to an earlier time.

Their web site confirms this with the following:

"If you let us know before you make an overpayment we'll apply this to your loan and this will reduce the total amount of interest you pay over the term of your loan and may reduce your loan term." along with a clear explanation as to how to go about this.

When I have been in the branch I have only been told the total that would be paid at the end of the full loan term and that I can’t pay extra each month or change it from 7 years to less than 7 years.

Like it or not, branch staff are salesmen. Indeed, they sell numerous products and don't always know the product features inside out. You can overpay. Overpaying will reduce the term. If you explicitly overpay it will save you interest.

When I asked how much is remaining in February 2013 I was told that the outstanding amount on the £8,000 loan was £12,417.14 which is £4,417.14 more than I borrowed.

Your total mount payable is close to £17,000. You're a third of he way through and a third of the total amount payable has been paid. It makes sense.

If you ask for a settlement figure you get a chunk of the remaining interest due cancelled. So your settlement figure will be less than £8,000.

I asked about complaining but Halifax haven't done anything, I even emailed the banking adviser with no reply

It's unusual for any saff member in a branch, other than the mortgage adviser, to have external email. Does this person still work for them? Have you tried a phone call? Have you contacted the company's complaints department?

Have I been missold the loan?

No. Somebody in the branch has confused you by implying you can't overpay when you can. The loan does what it says it should do and costs what it says it should cost.

or is there a way I can complain to a higher authority?

Well you could always pray. Then see how good the power of prayer is by taking action.

Contact the appropriate loan helpline from this set of numbers.

Or complain officially using a method acceptable to the bank.

No mis-selling. Just a minor misunderstanding that should be easily cleared up.

dealer_wins

£8000 @ 27.9%, absolute madness!!

mat5664

A bank like the Halifax giving an £8k loan at that 27.9% is morally questionable for sure - but sadly not mis-selling.

I would write into them and see if you can get it re-priced based on the absurdly high rate.

I presume your credit rating would not allow you to pay it off using a better rate from elsewhere, otherwise no doubt you would have done it.

imoneyop

mat5664 wrote: »

I would write into them and see if you can get it re-priced based on the absurdly high rate.

Why should Halifax re-price it? The OP agreed to the terms when he signed.

The rate is only absurd to you because you can probably get a lower rate - it would appear that the OP's credit history was non-existent, so he got a high rate. If he can apply for and get a lower rate now then that is up to him, if not he is stuck with what he accepted 2.5 years ago.

Dogger69

mat5664 wrote: »

A bank like the Halifax giving an £8k loan at that 27.9% is morally questionable for sure - but sadly not mis-selling.

I would write into them and see if you can get it re-priced based on the absurdly high rate.

I presume your credit rating would not allow you to pay it off using a better rate from elsewhere, otherwise no doubt you would have done it.

Why is it morally questionable? The OP approached the bank and was offered a product, which he chose to accept. There is no suggestion of coercion or underhand tactics?

Clive_Woody

mat5664 wrote: »

A bank like the Halifax giving an £8k loan at that 27.9% is morally questionable for sure - but sadly not mis-selling.

Morals do not come into it. Lending is risk based and risk is calculated using credit histories, there is no personal element. The bank is lending money and charging interest based on the risk (probability) of it being paid back by the individual. Somebody who has a good history of paying back debts, who has a good income to debt ratio, who has demonstrated that they are financially responsible will get the best rates.

A rate of 27.9% is not great but the bank did agree to lend the money, there would have been plenty of people who got an outright "no".

I would write into them and see if you can get it re-priced based on the absurdly high rate.

I would save yourself a stamp as this would be a pointless exercise.