Settling Logbook Loan early - Autoadvance

DizzyExponent1

Morning All

A bit of advice needed please...

I (stupidly) took out a Logbook Loan with Autoadvance last month

Borrowed £1900 - to repay £3866.58 at £214.18 per month for 18 months. I took the loan out in December and have made one payment of £214.18 so far.

A family member has offered this month to pay the loan in full and I will just pay her, I phoned Autoadvance for the settlement figure if paid today only to be told it is £2486!

Apparently this is due to the loan being 'loaded', their website states: "If you wish to finalise your repayments early you can do so – and there are no early settlement, exit or penalty fees to pay"

I also originally only wanted the loan for 12 months but I was encouraged by their customer service "if you are planning on repaying early you may aswell take the loan for 18 months instead"

Do I have any grounds for complaint as this surely cannot be legal?

Any help greatly appreciated

[Deleted User]

DizzyExponent1 wrote: »

Do I have any grounds for complaint as this surely cannot be legal?

It surely can.

The loan's not 'loaded'.

The settlement figure will be the capital, plus interest paid to date, plus two months interest on the balance (which they can charge for early settlement), less your one payment.

Can't check it without knowing the APR though.

foxy-stoat

Fix interest rate on their web site is 96%, representitive is 300.30%.

OP, what did your paperwork say?

DizzyExponent1

My loan percentages on my paperwork are are 69% - 226.4% representative so a little less than website advertises

I asked on the phone why the figure was so high and he said specifically said because our loans are loaded hence the confusion

Also if the website says "If you wish to finalise your repayments early you can do so – and there are no early settlement, exit or penalty fees to pay" surely they cannot charge two months interest as this contradicts above statement?

foxy-stoat

Ask them how they worked out the settlement figure.

Loan £1900
First months interest added £109.25 ( 1 12th of 69% )
Less first payment of £214.18
£1795.07

The settlement figure should not be more than £2001.51 or there abouts depending on payment and settlement date.

They are not able to front load the interest, remind them that they are bound by the FCA blah and they have to be fair and reasonable.

Unless your loan agreement included some big non-refundable set up fees/charges, what did your creidt agreement say?

MEM62

Their website is an advertising tool.
The critical document is the agreement you signed and it is the conditions contained in that agreement, which you have not doubt read and made sure that you are happy with, that will be applicable.

If the website suggests differently then the most you have to complain about is misleading advertising. That alone would not invalidate you loan agreement.

Gaz83

There's no way the APR is as (relatively) low as 69% if you're paying £214.18 per month. That way the loan would be paid off in 12 months, not 18.

Check your figures.

DizzyExponent1

Have read through my loan agreement, there is nothing in there at all about any up front charges etc all it says is amount of credit is £1900 and total charge for credit is £1966.58 repayable over 18 months.

I will give them a call and ask them for an exact breakdown in writing of how exactly they have come up with their figure and see what they say

Just wanted to make sure they are not allowed to load their loans as I will point this out to them but needed to know I was correct before I question them over this

TadleyBaggie

The APR must be around 105% to get that repayment figure.

Gaz83

I make it an APR of 109.54%, very roughly.

DizzyExponent1

Hello

Word for word what my agreement says:

Rate of Interest: Interest is charged for the term of this loan at the fixed rate of 69.00% per annum.

APR: 226.47%