Secured loan for £32,000. Paying back £90,000? HELP

moneyadviceneeded

Hi,

This will be a long one as I would like to give a clear picture so the advice given can be accurate.

This is for my ex-partner who I am trying to help as we have kids together.

In 2005 she signed up to a £32000 secured loan with Barclays. The loan was secured to her house which has a mortgage and around £60,000 equity in the current market (Valued within the last month)

When she took the loan, she was told she would not get the loan if she did not opt into the PPI which she did, this alone cost an extra £7000. After 5 years the PPI has now dropped off the account and she no longer has the secuirty of the PPI. She never claimed on the PPI and was compensated £1000 for this a few years ago.

However after speaking with Barclays and seeing others in similar situations it looks like Barclays are charging interest still on the £7000 PPI. This is one of many problems.

Now for the big issue. The loan is over 300 monthly payments, for the first 5 years the loan amount was £347 and dropped down to £288 when the PPI dropped off.

My workings out:

5 years = 60 months
60 x 347 = 20820
300 - 60 = 240
240 x 288 = 69120

Add the two together = £89940

So to borrow £32,000 plus the £7000 PPI = £39,000 @10.4% APR

So just to confirm.

Loan period = 300 months
Loan amount = £32,000
PPI Amount = £7000
Loan and PPI amount added together = £39,000
APR: 10.4% variable (They have confirm this has not changed throughout the loan)
Total pay back = £89940

We have run an Experian credit check and showed this to a independent financial advisor who cannot understand why this loan does not show up on the credit check. All the addresses are correct and she has not moved since taking the loan?

Can anyone tell me why or how this has been missed off her credit report? the score she had reflected this loan but no mention of it?

Is there anything we can do regarding the massive interest rates? Can we complain about this being miss sold. We have had nothing from Barclays except the contract she signed. No updates, no statements, not even a thank you for taking a loan with us.

I have spoken with an advisor from Barclays on the phone and he mentioned the APR was a monthly charge? I am guessing he means they charge us the APR every month?

He also said every overpayment we make they will charge us £60 to do so? is this right?


They have also said the total figure that standards at the moment is £18750

He explained that out of the £18750 owed, £16500 of this is interest?

He also mentioned that if we settled the loan early (In the next month of two) we would probably have to pay a lump sum of £16,000 to £17,000 estimate (We are waiting for a final figure to come through the post) to settle the loan.

How are they getting these figures?

I know she is at fault for getting herself in this mess and might I add I knew nothing of this when we was together. I am now finding all this out and trying to sort in the best possible way.

Can anyone help or advise us what we can and can’t do?

Is there any way we can fight the interest charges which to me seem extortionate?

Thank you in advance for your help

Kind regards

Mark

Pixie5740

Have you checked her Equinox credit file to see if this loan appears on it?

Your partner might have a case for being mis-sold PPI but I doubt she has a case for being mis-sold the loan. A loan with a term of 25 years will attract a lot of interest.

As for the over-payment charges, the terms and conditions of the loan should explain what the charges are for over-payments and early repayment of the loan.

Paully232000

moneyadviceneeded wrote: »

Hi,

This will be a long one as I would like to give a clear picture so the advice given can be accurate.

This is for my ex-partner who I am trying to help as we have kids together.

In 2005 she signed up to a £32000 secured loan with Barclays. The loan was secured to her house which has a mortgage and around £60,000 equity in the current market (Valued within the last month)

When she took the loan, she was told she would not get the loan if she did not opt into the PPI which she did, this alone cost an extra £7000. After 5 years the PPI has now dropped off the account and she no longer has the secuirty of the PPI. She never claimed on the PPI and was compensated £1000 for this a few years ago.

However after speaking with Barclays and seeing others in similar situations it looks like Barclays are charging interest still on the £7000 PPI. This is one of many problems.

Now for the big issue. The loan is over 300 monthly payments, for the first 5 years the loan amount was £347 and dropped down to £288 when the PPI dropped off.

My workings out:

5 years = 60 months
60 x 347 = 20820
300 - 60 = 240
240 x 288 = 69120

Add the two together = £89940

So to borrow £32,000 plus the £7000 PPI = £39,000 @10.4% APR

So just to confirm.

Loan period = 300 months
Loan amount = £32,000
PPI Amount = £7000
Loan and PPI amount added together = £39,000
APR: 10.4% variable (They have confirm this has not changed throughout the loan)
Total pay back = £89940

We have run an Experian credit check and showed this to a independent financial advisor who cannot understand why this loan does not show up on the credit check. All the addresses are correct and she has not moved since taking the loan?

Can anyone tell me why or how this has been missed off her credit report? the score she had reflected this loan but no mention of it?

Is there anything we can do regarding the massive interest rates? Can we complain about this being miss sold. We have had nothing from Barclays except the contract she signed. No updates, no statements, not even a thank you for taking a loan with us.

I have spoken with an advisor from Barclays on the phone and he mentioned the APR was a monthly charge? I am guessing he means they charge us the APR every month?

He also said every overpayment we make they will charge us £60 to do so? is this right?


They have also said the total figure that standards at the moment is £18750

He explained that out of the £18750 owed, £16500 of this is interest?

He also mentioned that if we settled the loan early (In the next month of two) we would probably have to pay a lump sum of £16,000 to £17,000 estimate (We are waiting for a final figure to come through the post) to settle the loan.

How are they getting these figures?

I know she is at fault for getting herself in this mess and might I add I knew nothing of this when we was together. I am now finding all this out and trying to sort in the best possible way.

Can anyone help or advise us what we can and can’t do?

Is there any way we can fight the interest charges which to me seem extortionate?

Thank you in advance for your help

Kind regards

Mark

Have you looked at equifax and callcredit/noddle?

FireWyrm

Pixie5740 wrote: »

Have you checked her Equinox credit

Is this a new credit reference agency?

Paully232000

FireWyrm wrote: »

Is this a new credit reference agency?

You can only check that one twice a year, bit late for the OP just now:-)

Gaz83

You could try sending a subject access request to Barclay's, which will cost £10 but will mean they have to send all paperwork they hold for her. You might be able to get the information about the loan on there.

That said, you'll probably have difficulty fighting the interest rates, given that (presumably) your OH was happy to sign up to a 25-year loan in the first place.

Pixie5740

FireWyrm wrote: »

Is this a new credit reference agency?

Nope, that's auto-correct working it's magic on Equifax.

Caz3121

you may want to look at this site
http://www.theguardian.com/money/loan-repayment-calculator-interest-rates
A £32k loan over 300 months will incur £58k of interest
a £39k loan over 300 months would be £70k of interest

If they are saying the settlement figure is £18,750 to pay now, this actually looks incorrect - less than £5k would have been paid off the debt with the remainder being interest, unless they have maybe refunded the PPI to the balance
After paying for 10 years the outstanding would be about £27k (v's £54k if the repayments continued for another 15 years)

CLAPTON

moneyadviceneeded wrote: »

Hi,

This will be a long one as I would like to give a clear picture so the advice given can be accurate.

This is for my ex-partner who I am trying to help as we have kids together.

In 2005 she signed up to a £32000 secured loan with Barclays. The loan was secured to her house which has a mortgage and around £60,000 equity in the current market (Valued within the last month)

When she took the loan, she was told she would not get the loan if she did not opt into the PPI which she did, this alone cost an extra £7000. After 5 years the PPI has now dropped off the account and she no longer has the secuirty of the PPI. She never claimed on the PPI and was compensated £1000 for this a few years ago.

However after speaking with Barclays and seeing others in similar situations it looks like Barclays are charging interest still on the £7000 PPI. This is one of many problems.

Now for the big issue. The loan is over 300 monthly payments, for the first 5 years the loan amount was £347 and dropped down to £288 when the PPI dropped off.

My workings out:

5 years = 60 months
60 x 347 = 20820
300 - 60 = 240
240 x 288 = 69120

Add the two together = £89940

So to borrow £32,000 plus the £7000 PPI = £39,000 @10.4% APR

So just to confirm.

Loan period = 300 months
Loan amount = £32,000
PPI Amount = £7000
Loan and PPI amount added together = £39,000
APR: 10.4% variable (They have confirm this has not changed throughout the loan)
Total pay back = £89940

We have run an Experian credit check and showed this to a independent financial advisor who cannot understand why this loan does not show up on the credit check. All the addresses are correct and she has not moved since taking the loan?

Can anyone tell me why or how this has been missed off her credit report? the score she had reflected this loan but no mention of it?

Is there anything we can do regarding the massive interest rates? Can we complain about this being miss sold. We have had nothing from Barclays except the contract she signed. No updates, no statements, not even a thank you for taking a loan with us.

I have spoken with an advisor from Barclays on the phone and he mentioned the APR was a monthly charge? I am guessing he means they charge us the APR every month?

He also said every overpayment we make they will charge us £60 to do so? is this right?


They have also said the total figure that standards at the moment is £18750

He explained that out of the £18750 owed, £16500 of this is interest?

He also mentioned that if we settled the loan early (In the next month of two) we would probably have to pay a lump sum of £16,000 to £17,000 estimate (We are waiting for a final figure to come through the post) to settle the loan.

How are they getting these figures?

I know she is at fault for getting herself in this mess and might I add I knew nothing of this when we was together. I am now finding all this out and trying to sort in the best possible way.

Can anyone help or advise us what we can and can’t do?

Is there any way we can fight the interest charges which to me seem extortionate?

Thank you in advance for your help

Kind regards

Mark

you need a settlement figure to make any sense of this i.e. a figure that if paid now will clear the loan completely

pheonix254

my thoughts and opinions on the situation:
clarify the PPI situation. Was it mis-sold - would the terms have paid out in the case of unemployment or whatever it was protecting against. Has Barclays automatically re-imbursed it already - what was the £1000 compensation for and where did that money go? Was the entire PPI amount + £1k used to pay off an outstanding amount (this is quite common)

Your calculations look correct at a first glance. a 25 year loan at 10.4% means you're paying back an awful lot more than the original amount - but I'd have thought that was agreed to upfront - not much in the way of mis-selling there.

Credit reports don't always have everything. Get your statutory reports from all 3 credit reference agencies - Experian, Equifax and Callcredit. It may be the loan is missing from one, or all of them. Things do slip through the cracks occasionally. This may work to your advantage later if lenders don't already think you owe a huge amount of money - you may be able to apply for another loan at a much lower rate to pay off the settlement, though I'm not sure.

The massive interest rate is what was agreed between her and barclays. you can ask them if you can transfer the balance to another product (loan) - they may decline, but if you don't ask you don't get.

APR is annual percentage rate. Not monthly. interest may be added monthly however, which is what I expect he was saying.

Overpayments may well incur additional charges - check the original agreement. If it's in there they can do this.

Check the guardian link above to see a typical loan breakdown and how the balance has been whittled down over the years. Set up your own spreadsheet to work out how they came up with their figure, or ask them for a settlement figure and calculations. The PPI situation is likely to complicate this.

What can you do? ask for a settlement figure and see if you can settle the loan ( for instance, taking another at a rate better than 10.4%), equally, speak to a proper independant IFA (not Barclays), or a reputable debt charity (like Stepchange) to see what your options are.

Interest charges will in all likelyhood have been made clear at the point of taking out the loan - I see very little mileage in being able to fight them - it's the Ts&Cs that were signed up to. They're not ridiculous - high, yes, but not outrageous for that type of loan.

There's quite a lot of work to be done here, kudos to you for helping her out. Best of luck with it, and I'm sure that others will be along to provide more advice.

cavework

Is this a First Plus loan?