I think my personal loan may have been miss-sold? Can i do anything about this?

daisycupcake

Hi there,
this is my first ever forum post!


I had my first proper loan of £5000 in 2011, I was 21 years old and wanted to buy a car and pay my insurance for the year as my car insurance for that year was £2300! The woman in bank said I it would be cheaper to get a loan for both, instead of getting a loan for the car and then monthly insurance. So they're both in one payment. Sounded great, but the next year i'm stuck paying the loan as well as having to renew my car insurance.


I got my first mortgage when I bought my flat in 2012. Now having a mortgage meant I was able to get lots more! The car I had was rubbish, falling apart and pretty old. I got roped into getting a car on finance. I spoke to the bank because I was concerned I was in over my head with the loan, finance and insurance on top of my out goings. I was only 22 at this time and pretty naïve looking back. The saleslady suggested now I have a mortgage I am eligible for a loan top-up! so why not add on my existing loan enough to cover the car finance, the next years insurance, and I could even get an extra £5000 for my self "to treat my self" all for only £330 a month which worked out cheaper that paying everything separately. In order to do this though I had to sign up for a royalties gold account. I have now realised this was miss-sold and I'm going through the motions to get my fees back as I didn't need to change my bank account.
So back to the loan, she ended up getting me just over £13,000.00 which looking back now is absolutely ridiculous for a 22year old isn't it?!? I struggled in the first year and after 1year I managed to get them to reduce the payments by switching it to a lower interest rate and adding on another year to agreement, saving me £50 a month. I had to use this £50 towards my monthly car insurance renewal.
2013 me and my partner had a baby girl, meaning eventually we had to move from our tiny 1 bed flat to a two bed house. Living cost are crazy, we we're paying £215 mortgage, then the move meant more money! bigger house... bigger price we pay £585 a month in rent. so £370 a month more as well as all the other up rising living cost.
I asked the bank on the next years loan anniversary if I could do the same as the last year and stretch the loan over another year to reduce the payments. They said NO. At this point I was in debt CRISIS, couldn't make ends meet, my incomings did not even cover my outgoings what a mess! I spoke to the bank after them saying no, to help me find a solution to my problem. They suggested an arranged overdraft extension the amount of 1 loan payment, this gave me the chance to pay off a couple of payday loans! I had no choice at the time, I hate payday loans, but didn't know what else to do. The agreement was extending my overdraft and reducing it by £30 a month until it was back to just £100 overdraft.


This is where I am currently at. I still have nearly £10,000 on the loan, I think the way they made it sound it was so wonderful to get this much money, without explaining the consequences! such as it's all good getting a 5yr loan to pay for 1year car insurance and spends, but don't point out what are you going to do next year?! their answer is to top up your loan... more borrowing, more borrowing and oh yeah more borrowing.


Me and partner both work very hard to provide a decent living and now after years of graft and a baby I have had to reduce my working hours (my partner is still full-time) because we can't afford childcare as she is under 2, jointly we earn over 16,000a year and even with help from tax credits we can't afford it. With me reducing my hours, obviously I get less wages, also we're getting less tax credits from an overpayment last year. Honestly life is such a struggle for us a young working family trying to make an honest living. Any help or advise would be really appreciated.


Does anybody think I could get something done about my loan??


Thank you.
P.S. Martin, I love the show, love the website. Always look out for you on this morning and I wouldn't have known about reclaiming my Royalties gold fees if it wasn't for you... not received yet, in the first complaint stage, but they have been co-operative and I mentioned the loan. Keep doing what you do best :0) xxx

PeacefulWaters

Does anybody think I could get something done about my loan??

Such as?

Adult signs loan agreements. Lender sticks to agreements.

If you can't make ends meet, get over to the Debt-free Wannabe part of the forum and seek help there.

DevCoder

Nothing in your post strikes me as any form of mis-selling. At 22 you are an adult and are competent enough to make a decision on obtaining credit (certainly in the eyes of the law).

Gaz83

I think you are being incredibly irresponsible by trying to blame everything on the bank.

Are you honestly trying to say that the bank are in some way to blame for not explaining what happens to a five-year loan you're only getting to pay for a car and insurance for one year? What did you think would happen in the other four years?

The only way you would have any comeback against the bank is if you can prove that you were advised to take these loans out. And I mean actually advised, as in an appointment with a loan advisor, and they weren't simply suggested as a possible option, but one in which ultimately the decision to proceed would have been yours.

Nope, I think you're just going to have to suck this one up.

dealer_wins

No mis-selling here.

Just several increases in outgoings after the loan was taken out (IE house move/baby) that made your affordable loan payments a struggle.

My advise would be to pay off the loan as quickly as you can, and think twice before ever borrowing money again. Each £1 you borrow means you are robbing your future lifestyle of £1.50+

daisycupcake

I know, I thought this would be the outcome. I'm not after getting the loan scraped, just maybe lowering the payments as my circumstances have changed. I'm not blaming the banks, but they do make it seem all sunshine and roses, it was an arranged appointment to help sort out my outgoings.

PeacefulWaters

daisycupcake wrote: »

it was an arranged appointment to help sort out my outgoings.

Your bank can't sort out your outgoings. They can finance and refinance to a point. But they cannot manage your budget for you.

At the end of the day a bank exists to sell you stuff in the same way as a supermarket or a clothes shop.

Life places financial demands on us now and in the future. By anticipating those future demands and setting money aside for them now you can avoid the need to borrow in future.

gycraig_2

So many people fall into this trap financing nice cars to show off when they live at home /have no kids. The banks thrives on young people making these decisions. Sell the car get a cheaper one and pay off most finance ?

iolanthe07

When you borrowed the original sum, did you have a plan in place to cover the next year's insurance?

thebritishbloke

As everyone else has said, the bank isn't at fault here, you are for not planning and wanting to upgrade your living arrangements etc. It's not their fault you had a kid etc.

I'm more interested in how two full-time workers are only earning £16,000 p.a. Two people over 21 on minimum wage working full time should be earning £23,000 between them after tax...

burlington6

It's a shame so many people have this attitude now. I bet you were fine with everything when spending the money