Welcome Finance have sold my debt

Phamous

Morning all!

I went freelance (I'm a designer) about six years ago. It was at a time when my credit rating was terrible so the only place I could get a loan to start my business was Welcome Finance.

Worst. Mistake. Ever.

So my loan was around £3000 and I was paying it off for around four years. My partner and I hit some financial difficulties last year due to a redundancy and so we went to Stepchange who budgeted our loan repayments (Welcome and others) so that we could continue to pay off any debts.

We're now in a much better position and I am about to pay off all of my debts and be completely debt-free (yay!) due to both of us working hard and earning more money and a small inheritance.

So - Welcome have apparently sold my debt to Activ Capital. I called Activ this morning to ask for a settlement figure and it is........ wait for it.......... £2,696. Six years of paying off the loan and I have managed to make a massive £304 dent in the debt. How is that in any way correct?!

Welcome's settlement figures were always significantly lower than the actual debt but Activ can only give me a 10% discount overall.

So it seems Welcome have sold on the debt and included the interest in full, which they would have been taken off if I had been able to settle directly with them.

This is where, I suppose, a thorough read and full understanding of the small print on signing up for the loan would have been beneficial.

I'm sure they legally can do this - but any advice out there from anyone?

Thanks in advance.

[Deleted User]

You'll need to post come figures for any clear advice - the APR, the term, any fees that have been added, your repayments to date.

The settlement could well be correct (and probably is) but we have no way of knowing yet.

Apples2

Two years worth of reduced payments would have bought a shed load of additional charges to your debt.
Wouldn't surprise anyone on here but you need the figures to see what is what.

Phamous

Thank you for your responses - I will ask Activ for all of the paperwork and report back.

jellie

Were you in a formal DMP? Welcome should have frozen your interest as soon as they agreed the amount of your payments.

Bit confused about your timings though - you got a loan six years ago (2008) over a four year period (2012), but then you say you got into financial difficulty a year ago (2013). So why wasn't the loan paid off in 2012?

pvt

No jellie - OP said they had been paying off for 4 years, not that it was a 4 year term.

jellie

pvt wrote: »

No jellie - OP said they had been paying off for 4 years, not that it was a 4 year term.

Yes I know. I 'assumed' it was a 4 year term to make the point, since OP was very specific and said their financial difficulties didn't happen until last year.

I suspect they hadn't been making payments for some time before the redundancy happened, and this is why the balance wasn't going down.

Becka38940

If you defaulted on your loan (which it sounds like you did if they sold it) then there would be no interest rebate as the full balance becomes payable. However, they may have offered you a settlement figure the same as Aktiv will, which of course will impact your credit rating.