Firstplus (elderbridge) secured loan

peter67

I took around 65,000 loan in 2003, and paid over 60,000 and still my capital balance around 53,000.
They keep increasing the rate as they like, it seems like I will be paying this for entire life span.
I am asking myself, am I living in the democratic country?
No forums taking interest to resolve this problem?


Intial stage, I mean first few yrs when Bank of England rate reduced or increased, the FIRSTPLUS was reducing or increasing the rate accordingly. But since 2007, Bank of England reduced the rates so many times, but this Bank never reduced but increasing the rates?


Over one year I was asking them the reasons why you have not reduced the interest rates, they keep sending letters saying that we are working on..please bare with us.. then one letter mentioned that they have not received sufficient information from the previous owner 'FirstPlus'?


Did anyone experience this? any actions I can take? Is it worth it now to consolidate the loan, which means I need to pay another 53,000 pounds? Please give me some advices

Gaz83

peter67 wrote: »

I took around 65,000 loan in 2003, and paid over 60,000 and still my capital balance around 53,000.
They keep increasing the rate as they like, it seems like I will be paying this for entire life span.
I am asking myself, am I living in the democratic country?
No forums taking interest to resolve this problem?


Intial stage, I mean first few yrs when Bank of England rate reduced or increased, the FIRSTPLUS was reducing or increasing the rate accordingly. But since 2007, Bank of England reduced the rates so many times, but this Bank never reduced but increasing the rates?


Over one year I was asking them the reasons why you have not reduced the interest rates, they keep sending letters saying that we are working on..please bare with us.. then one letter mentioned that they have not received sufficient information from the previous owner 'FirstPlus'?


Did anyone experience this? any actions I can take? Is it worth it now to consolidate the loan, which means I need to pay another 53,000 pounds? Please give me some advices

What has the interest rate been?

Variable rate loans are only ever going to vary one way 99% of the time.

What do your Ts and Cs say? Is there a minimum interest rate?

And we absolutely do live in a democratic country, you had a democratic choice to not take the loan out when you did.

peter67

Thanks for your quick reply, you have not answered to my key questions?
- why for a some time, they followed BoE rates and not now?, when I asked them why they have not replied to my Q?
If I am correct, this loan (unregulated...)
Please note that there are so many people affected by this Bank.


Variable rate loans are only ever going to vary one way 99% of the time - so why they have reduced about 4 or 5 times and stated in the letter clearly, due to recent Bank of England interest rate cut...


Hope you will understand that there should be a reasonable proportion between the capital and interest, if it is a small amount of loan then it does not matter, but when there is a large loan, For an example, 50,000 loan and if we end up paying 150,000 interest only, then clearly something went wrong. The government should take action against this...it looks like.. they can increase to any interest rate as they want so where we will end up?

peter67

current interest rate 9.5% and when I took at 8.2%

TrickyDicky101

Can you refinance elsewhere? The problem with variable rate loans (that don't track a specific index or rate such as the BoE Base Rate) is that they can and do increase and decrease largely at the whim of the lender.

Pixie5740

peter67 wrote: »

Thanks for your quick reply, you have not answered to my key questions?
- why for a some time, they followed BoE rates and not now?, when I asked them why they have not replied to my Q?
If I am correct, this loan (unregulated...)
Please note that there are so many people affected by this Bank.


Variable rate loans are only ever going to vary one way 99% of the time - so why they have reduced about 4 or 5 times and stated in the letter clearly, due to recent Bank of England interest rate cut...


Hope you will understand that there should be a reasonable proportion between the capital and interest, if it is a small amount of loan then it does not matter, but when there is a large loan, For an example, 50,000 loan and if we end up paying 150,000 interest only, then clearly something went wrong. The government should take action against this...it looks like.. they can increase to any interest rate as they want so where we will end up?

Do the T&C of your loan say the interest will track the BOE base rate? I suspect they don't. People have gone to the ombudsman about First Plus loans before but the ombudsman couldn't help.

Did you take PPI with the Loan?

System

peter67 wrote: »

They keep increasing the rate as they like, it seems like I will be paying this for entire life span.
I am asking myself, am I living in the democratic country?

What has a loan got to do with living in a democratic country?

Intial stage, I mean first few yrs when Bank of England rate reduced or increased, the FIRSTPLUS was reducing or increasing the rate accordingly. But since 2007, Bank of England reduced the rates so many times, but this Bank never reduced but increasing the rates?

Did anyone experience this? any actions I can take? Is it worth it now to consolidate the loan, which means I need to pay another 53,000 pounds? Please give me some advices

Its a variable rate loan. Whilst lenders tend to follow the BoE rates they're not obliged to unless the contract states that it does. And yes given the rate you're on you'd be better getting a loan at a lower rate however at £53k you're going to be looking at a secured loan.

dealer_wins

As its secured (presumably) on your home, maybe it would be possible raise the funds with another lender at a better rate.

If thats not possible throw every spare £1 at paying it off asap. Im assuming its a 25 or 30 year loan, so you still have many years of payments to make. By overpaying as much as possible you will save £1000s and clear it much more quickly.

Quote .."I took around 65,000 loan in 2003, and paid over 60,000 and still my capital balance around 53,000."

The reason your balance is so high is that you have had £65000 of their money for 15 years, and have been repaying mainly the annual interest on such a loan. Focus on overpaying big time, its the best way to sort this!!

Thrugelmir

peter67 wrote: »

Thanks for your quick reply, you have not answered to my key questions?
- why for a some time, they followed BoE rates and not now?, when I asked them why they have not replied to my Q?

Commercial decision. Depends on the cost of money to finance the loans amongst other factors.

When interest rate fell onus was on you to maintain level of repayments. This would have sped up paying down the loan.

ciderboy2009

OP - How many years was the loan taken out for?


Have you missed or been late with any payments?

How much do you pay each month?

When you took out the loan you would have been provided information including the total amount repayable. How much was this?

peter67

Thanks to you all. I will reply to each comment. I will wait for some more comments....