Welcome finance capitalisation

nicross

Hi I took a loan out with Welcome finance for £4000.00 in 2007 I missed a few payments but then got a debt comany to deal with this for for and I have been pauing them regularly through them for years. A few years ago I got a statment through that had Capitalisation each month it got higher. Eventually I got this aswell as intrest stopped. But its now six years later and I owe £6853.00.

Is this right can they get away with this?

Please help.

dunstonh

Is this right can they get away with this?

If the interest is capitalised then you would see a higher balance. That is normal. Instead of adding the interest as you go another way is to add the interest over the period to the balance and then you will reduce it down from there with your monthly payments.

[Deleted User]

nicross wrote: »

Hi I took a loan out with Welcome finance for £4000.00 in 2007 I missed a few payments but then got a debt comany to deal with this for for and I have been pauing them regularly through them for years. A few years ago I got a statment through that had Capitalisation each month it got higher. Eventually I got this aswell as intrest stopped. But its now six years later and I owe £6853.00.

Is this right can they get away with this?

Please help.

Your statement should show exactly how the balance is arrived at.

If the interest and charges were more than the total amount you have ever paid then you will now owe more than the original £4k borrowed.

I'm not really sure what you are asking? :huh:

confuseduk

same with me, took out a loan for a car in 2003 total loan 16,000.00 payments 15 yrs @ £250.00.... paid that for 5 years, then in 2008 had to leave work due to ill health but struggled to still pay debt, had a phone call from them, i told them i was struggling, in fact i broke down in tears, she said look let me see what i can do to help i waited about 2 minutes, she came back with we can reduce the payments to £150.00 a month will that help, i was relieved as it was a secured loan so 2nd charge on house i agreed, call ended, i guess that the term would be extended from 15 yrs to 25, 3 days later husband had to go sign for it, i didn't even though it was a joint account, so he did, when he came home he said it was for 30 yrs that would make him 83 and myslef 81, a year later in 2009 i had a statement saying starting balance £20207.30 and with all the Capitalisation each month we still went up! i phoned and spoke with the lady that had done this, she then and only then told me it was a re-write of the other loan! i was mortified as i can see no end to this to date i have paid from 2003 to now £26,592.00 i still have 19 yrs left to pay 228 @ 183.30 = £41,792.40 total for £16,000.00 will be £68,383.30
so be very careful dealing with them as they are very underhanded

[Deleted User]

Was watching some debt collection programme on Channel 5 earlier.

There was this guy, an ex services guy who now drives a taxi, who had his house broken into by the High Court Sheriffs as they arrived to reposses it. It was a part owned house. He owned 30% of it (no mortgage) and rented the remaining 70% of it. He was not in any arrears with the rent.

On the programme, they said it started with £5k worth of debt that grown to £30k with charges & interest etc. and as a result of the bankruptcy he entered into, the OR now wanted the house to release the 30% of equity in it.

At the end of the programme, it showed the poor guy living in a bedsit which he had to share with his wife who he said was threatening to leave/divorce him over the whole thing.
He was having to pay the rent on the bedsit ... and the 70% rent on the house that was now stood empty awaiting sale.

And to finalise it, they said with further costs due to the bankrupty and repossession, he now owed £100k.

A bit off topic, but just goes to show how much a £5k debt can grow to if you don't pay it back.

confuseduk

agreed, but i never ever missed a payment, my problem was taking the loan and not understanding what type of loan it was, and then hoodwink in to a re-write, wish this sort of stuff was taught in school