Am I being asked to repay too much for my Amigo loan?

Andydarlo

Hello and thanks for reading this.....

I have a guarantor loan with Amigo Loans. The loan was paid out on 1/2/12 for £55000 (£5k loan plus £500 brokerage fee). I was happy with the monthly repayment of £217.39. I was asked for my pay date, and a DD was set up to collect this from 21/3, and the 21st of every month ongoing. I have never missed a payment. I did overpay around 2 years into the arrangement when I could, but later circumstances forced me to offset the total overpayments against a reduced instalment one month, so there is no net benefit to me here. I continue to make this payment to the current day.

I can monitor my account online, which I do. I noticed, as is mentioned in the loan agreement, that interest is calculated daily. Being a curious person, I tried to replicate their calculations of interest in my own Excel document, which I did quite easily and was able to use this to model and predict the effect of increased repayments etc. I once noticed that my spreadsheet predicted I would make my final repayment in June 2017, having repaid £13,860.69 in total (63 @ £217.39 and 1 final at £158.48). However, my "FIXED SUM LOAN AGREEMENT" Gives a "Total Amount Payable:£13,043.22", "Loan Duration: 60 months".

I called Amigo to query this and was told that the details in the FSLA were approximate. Their records were identical to mine and they said their records indicated I would be repaying until June. The reason given was that the time between funding my loan and taking the first payment was 49 days, during which time interest was accruing on the full loan balance. This interest has obviously had a subsequent impact every month since.

I'm just wondering what the value of the actual documented and signed loan agreement is, if only some of the figures are valid. Or does the fact that my loan agreement indicates a total amount to be paid mean that the creditor is not entitled in law to any more? If the loan agreement specifies an initial, then 60 subsequent, repayments, can the creditor take more repayments than this?

I would like to know if I have a point or not? My next step would be to discuss this with Amigo once more, when I am more informed.

For the benefit of any amigo-haters out there, I am fully aware that if I cease repayments then my guarantor would have to step in (I am aware some people will have been expecting me to drop her in it for 4 1/2 years now) If I must repay in full until June 2017, then I will. I will not be avoiding this, neither will I make the slightest problem for my guarantor.

Nebulous2

Why did it take 49 days for them to take the first payment? Did you ask to pay on a specific date?

I'm not convinced you have a case. It would be difficult to prove with under/overpayments if your spreadsheet backs up their figures.

It highlights though an extremely high interest rate, if an extra 18 or so days leads to 3 further monthly payments.

marcarm

Nebulous2 wrote: »

Why did it take 49 days for them to take the first payment? Did you ask to pay on a specific date?

I'm not convinced you have a case. It would be difficult to prove with under/overpayments if your spreadsheet backs up their figures.

It highlights though an extremely high interest rate, if an extra 18 or so days leads to 3 further monthly payments.

That and having to pay back nearly £8000 on top of what was borrowed :eek:

Andydarlo

The loan was funded on 1 Feb 12. I advised FLM (as it was then) that I got paid on the 21st. Apparently it is their normal policy to begin collecting payments after you've had the loan for a month. I certainly wasnt given a choice as to whether or not I wanted to pay in the first month. I guess I could quibble with them over this.

The interest rate is high, yes. The fact that the 49 days were those when the balance was highest didnt help either.

So is a "FIXED SUM LOAN AGREEMENT" not really fixed? If 60 months was just a rough guide, and the total was only ever a stab in the dark, then can I just call them up to say that the £217.39 is only rough too, and I'll be changing around the amount I repay? Surely a loan agreement called "FIXED SUM" that specifies the "TOTAL PAYABLE" has to in some way be binding on both parties? I thought that the loan agreement was legally binding on both of us, not just me?

Nebulous2

Andydarlo wrote: »

The loan was funded on 1 Feb 12. I advised FLM (as it was then) that I got paid on the 21st. Apparently it is their normal policy to begin collecting payments after you've had the loan for a month. I certainly wasnt given a choice as to whether or not I wanted to pay in the first month. I guess I could quibble with them over this.

The interest rate is high, yes. The fact that the 49 days were those when the balance was highest didnt help either.

So is a "FIXED SUM LOAN AGREEMENT" not really fixed? If 60 months was just a rough guide, and the total was only ever a stab in the dark, then can I just call them up to say that the £217.39 is only rough too, and I'll be changing around the amount I repay? Surely a loan agreement called "FIXED SUM" that specifies the "TOTAL PAYABLE" has to in some way be binding on both parties? I thought that the loan agreement was legally binding on both of us, not just me?

Fixed sum loan agreement means they lent you a fixed sum (£5500) If you had paid everything as per the agreement everything would have worked out. If you extend the period until the first payment, with daily interest, either the interest rate or the amount payable will be wrong. You are trying to argue the payments should stay the same, which would reduce the interest rate. They are calculating based on the interest rate staying the same, and the payments changing.

I reckon they are right unfortunately.

Can you overpay at all? With such a high interest rate it would make a noticeable difference.

Andydarlo

I guess it was a long shot....

I'll keep going with the agreed repayment until I can free up some cash - I've a couple of items attracting slightly higher interest each month so want to clear them before overpaying this....

Thanks for all the advice.

Andrew

enthusiasticsaver

I have just looked up amigo loans for another thread and was shocked to find the interest rate was 49%!!! Presumably you have a poor credit history but I find it astonishing that loans such as these are taken out. Are your other debts really charging more than this?

It may well be that delaying your monthly payment has led to the increase in the overall cost of the loan. It is difficult to tell without knowing the actual interest rate you are being charged. Sometimes these loans also carry an administration fee which is included in the total overall cost so presumably you have checked this. I would query it anyway but if you delayed it by 49 days to tie in with your payday then they have a point that the overall cost will increase. I personally would have started payments on 21st February 2012. The agreement only stands if all conditions are met and I very much doubt that waiting 49 days for the first payment was one of the conditions.

saker75

I think this is the first Amigo Loan thread I've read where the recipient is paying it back and taking the debt seriously. We seem to see quite a few absxonders.

The interest rate is extortionate but sometimes it's the least worse option. The OP has done well managing the loan so far.

glennstar

Andydarlo wrote: »

(£5k loan plus £500 brokerage fee).

Please tell me more about the brokerage fee.

Bmth100

Andydarlo wrote: »

I certainly wasnt given a choice as to whether or not I wanted to pay in the first month. I guess I could quibble with them over

I have PM'd you but just saw this bit. If they set the date without asking you, it's Amigo policy to generally refund the additional interest.