Overpaid settlement on loan - twice!

Egeirn

Hope I'm posting in the right place

I've just received 2 letters from 1st Stop home loans who I currently have an existing secured loan with. To cut a long story short, we have had 3 loans with them, each settled early and restarted as a new loan. The letters received today state that they miscalculated the settlement figure on both settled loans and that they owe me a total of £1490. All very nice, but they've said that this money will be applied to the existing loan, given their earlier 'miscalculation' , im not happy with that and would like them to send me a cheque for the difference. The loan is, and always has been, paid on time and is fully up to date.

Can someone advise if I'm within my rights to request a cheque please?

Thank you

jonesMUFCforever

What do their terms and conditions say?

Superscrooge

The T&C's may stipulate the payment will be used to pay off your debts to them.

As this was cash you were not expecting. Surely it would be sensible to use it to pay off some of your debts rather than continually taking out new loans?

Egeirn

It's cash that should have been paid to me when settling the loans, this is their error and I don't trust that they are going to apply it to the loan as it should be applied. Effectively, my loan amount for the new loan should be reduced by the amount I have overpaid in settlement for the previous loans, therefore reducing either my repayments or the length of the loan. There is no communication at all to explain how they've allocated the money and I'd prefer that I was in the situation that I originally should have been had the loans been settled correctly.

I'm not sure that the T & C's will have anything that covers errors in settlements on previous loans ...

jonesMUFCforever

Egeirn wrote: »

It's cash that should have been paid to me when settling the loans, this is their error and I don't trust that they are going to apply it to the loan as it should be applied. Effectively, my loan amount for the new loan should be reduced by the amount I have overpaid in settlement for the previous loans, therefore reducing either my repayments or the length of the loan. There is no communication at all to explain how they've allocated the money and I'd prefer that I was in the situation that I originally should have been had the loans been settled correctly.

I'm not sure that the T & C's will have anything that covers errors in settlements on previous loans ...

I am sure that it does.

Egeirn

I've had a look and there's definitely nothing in the terms and conditions that could even vaguely cover this, & the basis of the credit agreement stipulates the (incorrect) settlement figure for the previous loan and the (incorrect) cash difference paid to me...

Can anyone help at all with this given that this is not covered by their t & c's?

AnotherJoe

Well I suppose if they won't give you a cheque for the difference instead (have you asked them?) then you could effectively make that happen by taking out an additional loan with them for the amount they've reduced your loan by, bumping up the new smaller loan back to where it was ?

And then you could look at fixing your finances so you aren't living on a continual loan, which is adding a constant uplift percent to your living costs.

Egeirn

Thanks for that, but I was really looking for advice on where I stand legally. I'm a little confused about your advice... to obtain another loan from them but to fix my finances so I'm not living on a continual loan? Maybe I'm missing something....

FYI, this is a loan from a few years ago, and as I mentioned it's paid on time every month, so I'm not living on a continual loan.

Dobbibill

Ring them and request a cheque....if they refuse and say they have already allocated it to your existing loan then request a statement for you to see how it's been allocated.

AnotherJoe

Egeirn wrote: »

Thanks for that, but I was really looking for advice on where I stand legally. I'm a little confused about your advice... to obtain another loan from them but to fix my finances so I'm not living on a continual loan? Maybe I'm missing something....

Yep what you are missing is Step 1, fix the immediate problem which is you want that money as cash now (by borrowing, its the same effect), Step 2, fix your finances so you dont need perpetual loans.

I could just have said "pay it all off and get rid of the loan" but that' probably unrealistic to do immediately, you seem [STRIKE]desperate[/STRIKE] very keen to have the money rather than reduce the loan.

FYI, this is a loan from a few years ago, and as I mentioned it's paid on time every month, so I'm not living on a continual loan.

It was the fact you wrote that you'd had three loans with them, each restarted, that made it seem as if you were taking out a loan, repaying it, taking out another one, repaying that, taking out another one,..... That sounds like living on a continual loan to me, but maybe it isn't ?????

Egeirn

If this had been payday loans that had been rolled over and retaken over a period of months, then I could understand your point. These are secured loans, each time they reduced the APR so that I was effectively paying the same amount each month for more cash borrowed. Maybe a bad idea, I don't know, but I can easily afford the repayments so this wasn't something I was looking for advice with. Thanks anyway.

In response to your point above in red, why shouldn't I be keen to have the cash?? This was cash I should have received had they calculated the settlement correctly, not really much to ask for given that they deal with settling hundreds of loans on a daily basis.

I'm really not sure what it is that I've done that you seem to disagree with, but neither do I care. It would be lovely if you could offer advice that's asked for instead of making incorrect assumptions about my finances.