Minicredit help please

l0uise

My MIL is having some trouble with this company. She took out a loan in January and because she found it difficult to pay the full amount owed she extended the loan intending to pay the loan in full in March. However, when she did this the loan became due two weeks before her payday. I've no idea how, when I looked into her account there wasn't a lot of information. She contacted the company and was told she could pay it on her payday in full. The trouble is they have added another 90 odd pounds on to the amount owed taking the loan to £257 from 165 which what from what I can see is loads more than just interest on the loan. They have called this a repayment plan! I told her to contact her bank and cancel the CPA. She tried in branch and they said they couldn't do this. I told her to phone them as she may have more luck but she won't do this now as she is worried they will try to take the money from her bank before her payday and they may be successful. Does anyone have any experience with this sort of thing? I would cancel the CPA immediately myself but I can't persuade her to at the moment. I would be grateful for any suggestions.

Tixy

Hi

If she has extended her loan for another month from the original paydate then £90 doesn't seem like a huge amount extra given their typical APR.

What was the original amount borrowed? and what was the original charge if she had repaid in full when first agreed?

Did she pay anything to extend the loan? how much?

l0uise

I'm not sure I think it was around £100. I've looked at their website and it seems when you want to extend a loan you have to pay £5 just to request an extension. Also, it says you are charged £50 for paying one day late and a further £25 for paying more than four days late. I reckon these charges may have been added as I know she paid around 50-60 pounds for a whole months extension and the payment she is due to make is in two weeks time

l0uise

Basically If the loan was around £100 she would have paid around 50-60 after the first month.

Tixy

I think it would probably mean a £5 admin charge to extend the loan, but would also expect the interest to effectively double as she is borrowing the money for twice as long.

l0uise

It's not twice as long as she is paying it in two weeks time, it's not a full months extension. If she had paid in full tomorrow it would have been around 160. If a full months interest is £60 I would have though an extra £30ish for two weeks interest and a £5 fee.

Tixy

She borrowed in January originally.
When was she first supposed to repay it? February? mid march? or was it always going to be a 2month loan and not repaid until tomorrow?

l0uise

It was a one month loan. She paid around 60 (all the interest and 5 pound fee I believe) in February so the amount owing in March remained the same. As she paid the first moths interest in full this left her about 160 to pay tomorrow, to settle the loan . As she can't pay until her pay day in two weeks time this has aded another 90 pounds or so on top.

Apples2

Can't you have a whip round and gather the money so she can clear it on time?
There is no simple way out of a Payday Loan spiral, this is what those eye watering APR claims are in real life and why you should never take one out unless you are confident you can repay it.

l0uise

Wish I could, I don't get paid until the 1st myself. I'm going to badger her to cancel the CPA as she's so worried they will try and take the money tomorrow and try an get her to ask to pay what she owes by cheque or something.

Apples2

Can she talk to her employer and request a cash advance (she takes it from them in cash and has a lower pay packet)?

Cancelling the CPA is only a minor victory, more charges will be added so she has an even bigger debt mountain to climb next month.