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Interest on my loan is greater than the minimum payment, what can I do?
tallpaullewis
Posts: 11 Forumite
Hi all,
I have a 25+yr loan (at 12.79%) that I have been paying back for the last year but am not getting anywhere with it. The minimum payment is less than the amount of interest that is applied each month. When I started the loan the balance was £24396 and now, after a 13 months of paying £265ish a month I am up to £24523. I am really looking for some advice about what I can do, I can't afford to pay any amount over my current payment (certainly nothing like what would be needed to edge towards paying it off).
As a back story, years and years ago I had one of the ill-fated 100%+ Northern 'Together' Rock mortgages that was part mortgage and part loan (both at the same 6%ish rate). This was then handed off to NRAM. When I moved again last year, NRAM wouldn't transfer the mortgage to my new house. The only thing I could see to do was to decouple the mortgage and the loan. I got a new mortgage, but the loan stayed with NRAM (and then recently sold to Landmark), but the rate was massively bumped, up leaving me here.
I have a 25+yr loan (at 12.79%) that I have been paying back for the last year but am not getting anywhere with it. The minimum payment is less than the amount of interest that is applied each month. When I started the loan the balance was £24396 and now, after a 13 months of paying £265ish a month I am up to £24523. I am really looking for some advice about what I can do, I can't afford to pay any amount over my current payment (certainly nothing like what would be needed to edge towards paying it off).
As a back story, years and years ago I had one of the ill-fated 100%+ Northern 'Together' Rock mortgages that was part mortgage and part loan (both at the same 6%ish rate). This was then handed off to NRAM. When I moved again last year, NRAM wouldn't transfer the mortgage to my new house. The only thing I could see to do was to decouple the mortgage and the loan. I got a new mortgage, but the loan stayed with NRAM (and then recently sold to Landmark), but the rate was massively bumped, up leaving me here.
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Comments
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Contact them, but it is highly unlikely the monthly payment has been set at the wrong level.
On a high APR, very long term loan, you often see small increases at the beginning, due to fluctuations in days in the month. Over time, it will come down.
Also check that you haven't incurred fees or missed payments.0 -
Your monthly interest should be about £260 so you're not paying much off BUT it should be going down. Check that fees etc haven't been added.0
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tallpaullewis wrote: »Hi all,
I have a 25+yr loan (at 12.79%)
How long is the term then if its more than 25 years?
If it is secured on a property I would sell it and down value until your finances inprove. If you cannot over pay then you will be paying your £265 for then next 25+ years.0
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