Welcome Secured Loan APR% Query

Tixy

ashley.mason.1982 wrote: »

Total Amount of Credit: £9694.16
Amount of Credit for Cash Advance: £6000
Amount of Credit for Insurances: £1694.16

Is one of those figures incorrect? As the second 2 do not add up to the first.

ashley.mason.1982 wrote: »

Now, every calculator tool I use, tells me that the ACTUAL APR% is more like 25.7%... does this mean that i have been sold a loan stating the APR is LOWER than the actual cost of borrowing, or am i missing something in my calculations?

What figures are you putting in to the online calculators? A loan of £9694.16 over 120 months at an APR on 25.7% would be monthly repayments of £225, your repayments were 'only' £194.

Also how long between the loan drawdown and the first repayment? that will affect how the APR is calculated.

Clive_Woody

ashley.mason.1982 wrote: »

Hi All,

I have seen about a dozen references to Welcome... none seem to answer my query.

I have a secured loan with Welcome, started in Jan 2008. We (My Wife and I) borrowed £8000 to pay for our wedding in Barbados.

I need somebody to confirm if the loan may have been mis-sold due to me finding the APR% indicated being 2.5% LESS than the calculators show as the actual cost of the loan. I was shopping around for a loan at the time, and we had offers on the same loan from other companies that were within that margin, and i'm worried we could have ended up paying more through this inaccurate APR% than we needed to.

We had to go with Welcome as mainstream lenders wanted to see both of us in employment for a year.

Now, from the Agreement, which is what i've been using to put into all the APR% Calculator Tools i can find on the internet, i have the following information:

Total Amount of Credit: £9694.16
Amount of Credit for Cash Advance: £6000
Amount of Credit for Insurances: £1694.16

Amount of each Monthly Payment: £194.17
Number of Monthly Payments: 120
APR (variable): 23.20%

Total Charge for Credit (M+N+O): £13606.12
(M)Acceptance Fee: £235
(N)Broker Fee: £400
(O)Interest Charge: £12971.12
Rate of Interest per Annum: 21.00%

Now, every calculator tool I use, tells me that the ACTUAL APR% is more like 25.7%... does this mean that i have been sold a loan stating the APR is LOWER than the actual cost of borrowing, or am i missing something in my calculations?

Due to my circumstances changing through illness, we looked into all the credit agreements we have and spent a small fortune on Subject Access Requests, to be sure we are paying the right amount to the right people, and not being ripped off, and in this case, it feels like we could have chosen a cheaper alternative if they had told the truth about the APR?

In dispute and making no further payments until they can prove the working method they used to calculate the APR%.

What outcome are you hoping for? If you are hoping for the entire debt to be written off then I think you are going to be disappointed.

Apples2

I think you've already convinced yourself this is both mis-sold AND unenforceable.

Please keep this thread updated if you decide to stop repaying and claim all you repayments back (assume you wish to keep the money they lent?).

Crystallady

Now, from the Agreement, which is what i've been using to put into all the APR% Calculator Tools i can find on the internet, i have the following information:

Total Amount of Credit: £9694.16
Amount of Credit for Cash Advance: £6000
Amount of Credit for Insurances: £1694.16

As Tixy said these figures are wrong - the bottom two should equal the top one. As you say the loan was for £8,000 I expect the middle figure should be £8000 not £6000.

This may have an effect on your calculations.

Caz3121

ashley.mason.1982 wrote: »

Amount of Credit for Insurances: £1694.16

Due to my circumstances changing through illness, .

Did you see if your illness was covered by the insurance?

John1993_2

ashley.mason.1982 wrote: »

Now, every calculator tool I use, tells me that the ACTUAL APR% is more like 25.7%

That's strange, I just put in your amounts (£9,694 borowed, 10 years at 23.2%), and it told me that you shoudl expect to pay £195 per month, for a total interest charge of £13,600.

As others have said, you seem to have your figures wrong.

Even had you been right, by the way, you'd still be liable to pay the money back. Stopping paying is lunacy.

StuC75

Not forgetting that Interest rate % and APR are 2 different things..

You borrowed 9,694.16 (with insurance added in) over 10 years at 21% would be £193.82 - according to my rough calculation in excel :-

=PMT(0.21/12 , 120 ,9694.16)

willowthewisper

Just reading your thread .. Notice you have a broker fee on this we have just claimed our back plus 8% redrew of interest had to go to FOS and took 8 months but worth it ... Might be worth you looking into if you go to FOS website you can search on the upheld cases and company name do you'll see it there and what other have written

ashley.mason.1982

Clive_Woody wrote: »

What outcome are you hoping for? If you are hoping for the entire debt to be written off then I think you are going to be disappointed.

I'm hoping that they redraw the agreement and calculate the payments based on the cost of borrowing they sold me. I have only stopped paying as it is the only way to get them to !!!!! their ears up.

If we do get it written off, this is their loss and our gain, but the intention is to get the matter straightened out and pay what is fair.
Not to mention my other account which is a HP, in which they repossessed the car and said I'd done a VT. totally false and no letter of requesting a VT in the file.

John1993_2

ashley.mason.1982 wrote: »

I'm hoping that they redraw the agreement and calculate the payments based on the cost of borrowing they sold me. I have only stopped paying as it is the only way to get them to !!!!! their ears up.

As has been pointed out to you up above, you seem to have your figures wrong, and the lender seems to have then right.

Any chance of you responding to these points?