I was ill advised on a loan and really need help! :(

gemhardy

I am a young graduate who back in april was offered my first well paid job (after graduating July 06) and in between jobs needed about £1000 to keep me going (commuting to London and all), I went to the bank one Wednesday as I needed some cash by the following Monday really.

I had a student/graduate account and thought it best to get a graduate loan however was told I wouldnt get the loan in time, so would have to change my account to a current account to obtain a loan. I told them the amount i needed, but was persuaded to then get an extra £2000 to pay off my overdraft (i was a student after all!), therefore in total would need £3000. In the end I was actually bullied in my opinion, to get a £5000 loan. They told me "for only an extra £20-30 a month you'd get an extra 2000 which you could always use to save with". I felt i didnt really need that, but thought they had my best interests... they said in any case "with this loan you are able to pay off bulk amounts" and told me that i would have a maximum £7700 to pay back - with the interest.

As it turned out I didnt need the extra money so went to the bank to pay off £1500. I found out later using only my online banking that i set up around 3 months later, that the loan IS £7700 regardless of the time it took to pay back, that the interest was incooperated into the loan which i did not know. When i went to pay back that £1500 i was NOT told that it would make any difference.

My complaint is that realistically I have only actually made use of £1500 of the (now £7700) loan after taking into consideration the £2000 overdraft.

I am so upset about this as I am only young and inexperienced in this and so totally ill advised and did NOT need a £5000 loan and now could actually use the £1500 I paid back for absolutely no reason.

PLEASE does anyone have any advice? Im seeing the bank tomorrow morning and need to go armed with some steps I should take

Thank you so much

Gemma

Iamthesmartestmanalive

You dont have a case im afraid

Being naive isnt a defence

As far as I can tell is they never missold the loan, they merely sold a loan, it isnt their responsibility to talk you out of taking an inflated loan, the opposite, you agreed and received the funds, they delivered their side and your responsible for your side i.e the payments

Re the figure, as far as i can say they made you aware of the final sum and if you didnt read the agreement fully that is your fault

Not theres

mountainchrisriver

If you didn't need the extra £2000, why did you only try repaying £1500?? The only thing you may be able to get back is any insurance you are paying on the loan... called PPI if my memory serves me correctly...

Other than that Iam... is right, nobody forced you into taking a loan out for £4000 more than you actually needed, you could have easily said "no, I just need £1000" Your graduate account overdraft was probably interest free (or at least very low interest rate) aswell? so why on earth you would want to take a loan out to pay it off...

Good luck chatting to the bank... just don't sign anything whilst you're there!

gemhardy

I feel that I at least have a case to complain about that particular service in that they did misled me totally. I had reached my overdraft limit of £2000 so needed cash promptly, and was told that I would have to change my student account to a current one, and then the interest for a £2000 overdraft then would be massive (so told that i should pay it off). The main problem is that I was given no advice whatsoever about paying back the £1500 that i did. I was originally told I was able to make these bulk payments, but if it made no difference to the amount of interest i was paying back, who in their right mind would do this? it was pointless in telling me this when i got the loan. It was awful, awful service. praying on someone who didnt know! But thanks for the feedback.

dmg24

gem,

You are a graduate, surely you were capable of taking the figures away and working out what was the best option for you? x

CLAPTON

Do you have the T&Cs of the loan... if not get a copy and read them carefully before seeing the bank tomorrow.

It should lay out the costs associated with early settlement (i.e. repaying the entire loan early) and how overpayments are handled.

You haven't made clear the current situation but if overpayments dont reduce the total interest then your best strategy is to save up (in an interest baring a/c) until you have enough to settle the loan completely.

luxorsandy

I may be way off on this one, but I was reading the Office of Fair Trading's web site yesterday and it sounds like you've got one of these 'nil refund on early repayment' loans. The OFT have alot of info on their page about these situations so it may be worth a look. If it is a 'nil refund' loan then they consider these to be unfair and think that the banks should only charge a penalty that would cover 'reasonably incurred costs'.

Apols if this isn't relevant to your particular case, but it may be worth a look.

Best of luck!

missile

Your best option will be to explain why you felt you were inappropriately advised and ask them if they are prepared to help you with YOUR error.

They did nothing wrong, banks are in business to make money from their clients and you have found this out the hard way. They will be keen to retain your business and MAY wish to make a token gesture to keep you as a client. If not take your overdraft elsewhere.

mummytofour

Put it down to life experiance, get it paid off asap and move on.

nomoneytoday

Unless they held a gun to your head as you signed the contract a la Godfather films, then please take some responsibility for your own actions..