Mortgage Mis sell ? Secured Loan)

Headancer

Please be gentle....

I took out a secured loan in 2007.

T+Cs indicate

Total Loan amount was £27,000 plus completion fee and broker fee

TOTAL AMOUNT OF CREDIT £28,620
Monthly payments were £282 x 252 monthly instalments.

I was assured the monthly balance would reduce over time.

I'm currently paying £204 BUT this is based on a libor of 6%

I have thus far paid circa £25K so far ........it has not come down dramatically as promised. When I asked for a redemption figure it is STILL £24K

The loan was taken out with company A, passed to company B and is now with company C

I have a copy of the original signed T=Cs companyA

Two questions

A) Should the redemption figure be much lower given I have paid out an average of £27K so far? (being the average of £282 / £204)
add this to the redemption figure £24K and its over £61K !!!!

Does that seem right ?

Also I didnt think I had paid out PPI BUT interestingly there is a paragragh "optional monthly credit insurance". Is This a form of PPI ?

"You have applied for optional credit insurance cover the benefits of which have been explained to you ....." Well If I did I have no idea what proportion of the loan this relates too as it isnt broken down.

Does this all seem OK , if not, is there any way a claim can be made given it has been passed thru different companies.

The T=Cs are the original, no forms have been signed subsequently

Finst

What was the interest rate you thought you were paying on the loan?

The monthly payments of £282 x 252 months works out to be an interest rate of 11%, with a total amount to pay of £71,064. That is broadly consistent with the redemption figure you've been quoted, so it appears like the maths works. 11% is very high for a mortgage, but I understand secured loans (often used to pay off credit card debt) have a higher rate.

As for the "have you been missold", I don't know, it depends what they told you when you got the loan. Others will be able to to comment on what they needed to tell you.

Ganga

If the figures you have supplied are correct ie £282.0 x 252 months (21 yers) you will pay back a total of just over £71,000 !!as you have only paid £25000 you have a long way to go.Check if you are paying PPI as if reclaimed back it will reduce the balance owing.

Caz3121

Headancer wrote: »

TOTAL AMOUNT OF CREDIT £28,620
Monthly payments were £282 x 252 monthly instalments.

I was assured the monthly balance would reduce over time.

You might be interested to see how your payments are split over time
With a long loan like this the initial years are made up mostly of interest
year 1 payments will pay around £2,985 in interest and £395 off the balance
so at the start of year 2 you have £28,225 owing
year 2 payments will pay £2,943 in interest and £438 off the balance
so at the start of year 3 you will have £27,787 owing....etc
each year as the balance reduces the interest decreases so the amount coming off the balance increases
In the final 12 months the interest payment are £185 and the amount off the balance is over £3k

what do you mean when you say it would come down 'dramatically'? the amount you save by paying to off earlier than planned is a saving..as you say if you paid it off now you would have paid £61k instead of the planned £71k if you continue to the end so a saving of £10k

foxy-stoat

I think you mis-bought rather than been mis-sold.

If the interest is 11% then £28,620 X 11% /12 = £262.35 interest for the first month, less £282 monthly payment means you would owe after month 1 £28,600.35. So for the first 5 years or so you would of only paid £1200 off the capital with your £16,920 monthly payments.

If you do the calculations until the term ends you will see that your paying a lot more interest than capital until probably year 12 ish.

Any way you can sell the property and down value to clear the secured debt and start again?