118 Money settlement figure more than loan

ajames90

Hello
I am just looking for advice as a few months ago I took a loan out with 118 Money for £1300. The terms of the loan were as follows:
Duration of loan: 24 months
Interest rate 71.13%
Interest amount added: £1200.80
Total amount repayable: £2500.80

To date, I have made 2 payments of £104.20.

I have today request an early settlement figure as I was lucky enough to come into some money (not a huge amount but enough to pay off my creditors) and have been given a settlement figure of £1402.67.

So, I have made two payments and this has done nothing to pay off anything towards the amount I borrowed (£1300)? And they are asking for a settlement figure for more than the amount I borrowed?

I don't know why the two payments I have made to date haven't paid a portion towards the amount I borrowed and why the settlement figure is more than the original loan amount despite making 2 payments.

Any advice would be much appreciated!

[Deleted User]

It's because you have a loan with an insanely high APR. Most of your payments have gone towards the interest, and they are now asking 2 months interest as early settlement.

Pay it off as soon as you can.

JimmyTheWig

Admin fees. Plus the fact that they haven't been able to lend that £1300 to anyone else in the meantime.
I'm sure it would have been part of the original loan agreement that you took out.

In effect, the answer is "because they can".

iolanthe07

Most lenders will charge one or two months interest for early settlement. 71% interest is absolutely outrageous, imho.

[Deleted User]

Criminal they're allowed to charge 71% over 24 months.

That's my gripe with "2158% APR for a payday loan is expensive". Yes it is, but 71% on £1,300 is even worse in my view.

Echo the above. Settle it ASAP and put it down to a very bad experience!

cmc_entertainment

As pe my replay on another thread on 118

Regardless of how much you overpay, 118 will still take 2 normal amounts scheduled payments from you BEFORE the payments are reduced. So if you multiple overpay, they will not take effect for 3 months.

Also, all loans over 12months are charged 58days interest.

Taking this into consideration, it may not be beneficial if you do pay off a major lump sum off and to take the 3 month rule into consideration as well