Deferred loan? Am i being overcharged?

cleanslateguy

I took out a deferred loan of £4400.

That was in June 2012. Now in June 2013 one payment came out for 191 at a rate of 29.9% APR. Is this rate too high even if I accept? It's quite an extraordinary rate considering that banks charge 7%. I have an extremely good credit rating at 999 and this was the first time I have taken a loan out.

Also, I intended on paying the loan early but haven't been well and I forgot about the loan itself.

They are telling me that the settlement is £5965. It seems a bit steep to settle after one year of 60 months agreement and be charged £1500 interest which is already 35% of the total borrowed.

Any help would be very much appreciated.

What about consumer credit directives allowing me to make overpayments to the capital balance to lower my interest? ECCD of 2011.....

Thanks very much guys. :beer:

Tixy

What did the credit agreement say when you took out the loan?

Did it give that APR? If so then yes they can charge it. If you were not happy with the rate or the total amount you would end up paying then the time to decide that was before you took the loan (or within 14days of taking it).

What about consumer credit directives allowing me to make overpayments to the capital balance to lower my interest? ECCD of 2011.....

What about them? Has your lender told you that you are not allowed to make overpayments? They won't change interest that has already been accrued during the past year if that is what you are querying?

[Deleted User]

What do the terms say re the rate?

On another note, your score is irrelevant and with a limited credit history, you will be seen as higher risk.

pvt

Perhaps I'm misunderstanding, but if you took out a loan of £4400 at 30% interest, and haven't made any payments during the first year, then the amount they're quoting sounds about right.

_Andy_

"29.9% APR. Is this rate too high even if I accept? It's quite an extraordinary rate considering that banks charge 7%."

What do you mean 'too high'?
Just because another lender may charge a lesser rate doens't mean all lenders should.

Good_Goose

The fact you have written "banks charge 7%" undermines any credibility your post probably didn't have anyway.

John1993_2

cleanslateguy wrote: »

Is this rate too high

Too high for what?

It's quite a bit more than I'd pay to borrow money, it's a little bit higher than I paid for a motorbike loan 20 years ago, and it's vastly less than Wonga charge for their loans.

As others have asked, if it was OK a year ago, how can you think that it's too high now? I'm assuming that the rate hasn't changed; is that right?

Clive_Woody

cleanslateguy wrote: »

That was in June 2012. Now in June 2013 one payment came out for 191 at a rate of 29.9% APR. Is this rate too high even if I accept?

I think you accepted this rate when you accepted the money and spent it

It's quite an extraordinary rate considering that banks charge 7%.

Why did you not get one of the 7% loans in the first place?

_Andy_

See Ops other threads for equally confusing issues

lynz68

It's a bit late questioning the loan rate now that should have been done when you took out the loan. Yes 29.9% is a horrendous rate of interest but you accepted it when you took the money and now it's time to pay it back.

Clive_Woody

_Andy_ wrote: »

See Ops other threads for equally confusing issues

Cool, this will make Friday simply fly by....:money: