Shawbrook Bank Boiler Loan

katiejr

Hi, I’m after advice and opinions.

In Dec 2014 my daughters boiler stopped working, they got a quote from help-link of £2436, they had no savings so agreed to take out finance to get the boiler fitted. I have just cleared the debt after she has paid it for 5 years.

Original loan amount £2436
Monthly payment £33.97 total over the term £4076.40
Interest amount on full term of loan £1640.40

Contacted them to pay off balance after 60 months
Total paid £2038.20

Settlement figure £1580.67

I have calculated that after 5 years of payments she has only paid £856 off the original debt, and £1182.20 in interest

I think this is excessive interest and that they have purposely made repayments low and the repayment period long to make more in interest, I find this is so unfair does anyone else think the same

[Deleted User]

A high rate loan over a long period will always incur high interest.

Hopefully it's a lesson for her to check the details of what she will pay before signing.

The interest may be high, but excessive, as the customer has the choice to accept or not.

DCFC79

katiejr wrote: »

Hi, I’m after advice and opinions.

In Dec 2014 my daughters boiler stopped working, they got a quote from help-link of £2436, they had no savings so agreed to take out finance to get the boiler fitted. I have just cleared the debt after she has paid it for 5 years.

Original loan amount £2436
Monthly payment £33.97 total over the term £4076.40
Interest amount on full term of loan £1640.40

Contacted them to pay off balance after 60 months
Total paid £2038.20

Settlement figure £1580.67

I have calculated that after 5 years of payments she has only paid £856 off the original debt, and £1182.20 in interest

I think this is excessive interest and that they have purposely made repayments low and the repayment period long to make more in interest, I find this is so unfair does anyone else think the same

Not unfair, high interest but that's what you get when you go to someone like Shawbrook.

Why is it unfair ? They offered a loan for x amount with the stated interest and your daughter accepted it, surely other options were available ?

katiejr

It just seems disproportionate for the period she has paid and considering it was settled after 5 years. Yes hopefully lesson learnt, at the time it was December just before Christmas and she had no heating or hot water so didn’t really look into alternatives.

Gaz83

katiejr wrote: »

It just seems disproportionate for the period she has paid and considering it was settled after 5 years. Yes hopefully lesson learnt, at the time it was December just before Christmas and she had no heating or hot water so didn’t really look into alternatives.

That's just the way loans work, at the start you always pay more in interest as the balance is higher. As the balance decreases the interest decreases.

Willing2Learn

katiejr wrote: »

It just seems disproportionate for the period she has paid and considering it was settled after 5 years. Yes hopefully lesson learnt, at the time it was December just before Christmas and she had no heating or hot water so didn’t really look into alternatives.

Hopefully your daughter will have had her 'light-bulb-moment' and is currently building a decent Emergency Fund (EF), (so that she has money for the next rainy day, when it occurs).