loan with G E Money

LynV

We have a loan with GE money which has just over 5 years to run. I am confused by what is meant by Interest Bearing Charges Incurred?
I would like to know. We are coming into a bit od money soon through a family member would it be beneficial to pay this off then. Not the loan just these charges.
Many thanks.

jonesMUFCforever

Not enough information here.
How much money is outstanding and at what rate?
With interest rates very low if your credit rating is good then maybe a new loan to pay all of it off might work out better?

LynV

Our total to repay is around £18,500. Interest rate is 0.625% per month (7.50% per year). We get a statement every April showing payments in and interest added we are reducing at about £3,00 per year. Mortgage is paid by the end of this month. So I want to start paying an extra £100 or so to GE Money. But do I have to pay the £712.29 Interest bearing charges incurred first.

DevCoder

Did you fall into arrears / miss payments?

LynV

I believe we have but only on a couple of occasions. so should I pay that incurred charges off?

DevCoder

To me the wording indicates that you have incurred late payment charges (or other such) and that these are now interest bearing.

Not too sure it makes any difference whether you now pay off the interest bearing charges (unless they are either being charged on an ongoing basis for having missed payments (ie a charge every month) or the interest rate for charges is beyond the loan rate).

Either way, for tidiness I would get rid of the interest bearing charges, if only it looks better (this might have no impact whatsoever on credit worthiness etc just an OCD of having a statement without the words "interest bearing charges:)

LynV

I think these charges get interest charges each month so I will pay them off and as you say it looks better with them not on the statement. As mortgage is paid almost I will fire and extra 100 pounds into the loan to get it paid off quicker.

Tixy

Was there an original valuation fee that you added to the loan - if so then that would be likely to subject to interest.

Failing that its could be charges from missing payments. Can you track back each annual statement to see when they started charging them?

They are likely only incurring the same interest rate as the rest of the balance each month.

LynV

I am sure now and again a payment has been missed or late. Hubby can't work since having had a stroke 3 years ago leaving him with short term memory loss. So some months money is tighter than others. We manage month to month as a rule. But sometimes its tight and problems happen. But I am upbeat with mortgage about to be paid and a small family inheritance due. So will clear these charges and fire an extra 100 pounds to them every month and get totally debt free in around 4 years.

DevCoder

Well done for staying positive and I wish you both all the very best.

jonesMUFCforever

No PPI on this then.