Help with a loan from Beneficial Bank that was sold to TBI

Lynneyy

Hi there,

I wonder if anyone can help me please?

My Mum and Dad took out a loan for £1,800 with The Beneficial Bank about 28 years ago. My Mum & Dad split up 22 years ago, and the debt was left with my Mum to deal with. They had a fixed payment that they paid every month but my Mum was struggling & Beneficial sold it to TBI and a payment of £10 a month was agreed.

My Mum is STILL paying this £10 a month 28 years later, and TBI just keep adding on more and more interest. The final straw was she got a new statement through (loan was nearly paid off) and they had added £1100 of interest on. So she stopped paying the £10 for the past 4 months and today we got a letter through the post saying she must pay £2481 before 3 March or they will get a CCJ against her.

I dread to think how much money she has actually paid to Beneficial Bank.

As I said, original loan was £1800, and she still owes £2481 - 28 YEARS LATER!!

Can anyone help me with this? I don't want my mum dealing with it, as it's stressing her too much.

Thanks

Lynne

[Deleted User]

Can she/you afford to pay it off? If she's on a long term arrangement and interest is still being applied, then it's not going to get any better.

You may want to see if they will accept a settlement.

Lynneyy

Hi zx81, no we dont have the money to pay it off. I just don't understand how she can still owe £2481 when original loan was only £1,800 28 years ago?

[Deleted User]

It sounds as if she fell into arrears and agreed a token payment. Obviously, £120 a year doesn't make much of a dent in a debt, especially if interest is being applied.

You need to understand from your mum or the company what the status on the account is. Particularly find out if it has defaulted. Her statements will show payments and interest applied.

Lynneyy

Thank you. I'm going to call them today

Pixie5740

Is this loan secured or unsecured?

Brock_and_Roll

Well £1,800 28 years ago is the equivalent of around £4-5k in todays money so I am guess it was an unsecured loan (but the OP should check). At the time Beneficial did a lot of lending directly and via sales aid finance.


Base rates were around 15% in 1989 so it is actually quite easy to see how the interest on this has stacked up so much.


Assuming the finance rate was say, 17%, then interest alone would be £306pa so if the OP's mum is only paying £120 per annum, the balance will keep on rising.


Obviously as they had been paying the loan 6 years before they default then the capital balance at that point would not have £2800. Assuming the original loan was 10 years at 17% then the balance at the time of default would have been about £1,710.


Given that interest on £1,710 would be £24 pm but the OP's mum was only paying £10pm, then obviously interest will be stacking up. However, it looks as if interest must have been frozen at some point otherwise, under my model in 2017 (month 336!) the balance would be £44k!

poppasmurf_bewdley

Send them a CCA letter.

https://forums.moneysavingexpert.com/discussion/709639

If it's 28 years ago, it's a pound to a penny they cannot supply the required information and the debt can safely be ignored.

Lynneyy

Unsecured x

Lynneyy

Thanks for this. I'm worried to call TBI, as they are so unhelpful and just saying pay or they will do a CCJ. I just feel my mum has probably paid this off already. They cant give me original paperwork or anything. I'm rubbish at things like this too, so unsure what to do for the best?

Lynneyy

@poppasmurf
Thanks for this, letter getting sent tomorrow morning.

All help everyone is very greatly appreciated