Loans2Go question

DrEskimo

eLdn123 said:

SnowTiger said:

APR of 1,000% is a monthly interest rate of about 22%.

Month 1: loan: £1,000; interest added is £220; you make a payment of £227.77.
Month 2: loan: £992; interest added is £218; you make a payment of £227.77.
Month 3: loan: £982; interest added is £216; you make a payment of £227.77.
Month 4: loan: £970; interest added is £213; you make a payment of £227.77.
Reamining: £955.

I've rounded the figures.  At such a high APR even a small rounding can lead to quite a large discrepancy.  However, as you can see after making payments for four months you have only paid back about £45.

Loan remaining £955 + arrears of £1,138.85 = £2.093.85.

A settlement figure of £2,100 seems about right.  Loans2Go has probably done its calculations with more accuracy than I have.

As with most loans, in the early days most of what you pay goes towards interest.

Interest per annum quoted at 207.6%, which would translate to a monthly interest value of 17.3, so out of 1000£, would be 173£ per month. Based on this, would it not be :

Month 1 loan 1000 interest added 173, payment of 227.77

Month 2 945.23 interest added, 160.6901, payment 227.77

And so on ?

£1000 paid off at £227 per month over 18months would equate to ~1000% APR, not 207%. Are you sure the quoted APR is correct?

Is it stated as a flat rate, rather than APR?

DrEskimo

eLdn123 said:

MalMonroe said:

Hi, I hope it's not rude to ask but do you now have your gambling addiction under control? It's just that if not, your financial situation won't get any better. Have you thought about contacting one of the debt help agencies such as StepChange, 0800 138 1111? It's free, confidential and non-judgemental. They will be able to offer advice about how to deal with Loans2Go, which sounds like a despicable company. I contacted SC a few years ago when I was at my wit's end. My financial problems seemed insurmountable and they really did help me. You don't have to meet anyone face to face at any time. Sometimes the Financial Ombudsman is also able to intervene in cases where people have been given loans inappropriately. I feel that this may have happened in your case, since gambling addiction is now a recognised illness and the NHS suggests that gamblers contact the National Debtline on 0808 808 4000.  Either someone there or at StepChange will be able to advise you, I'm sure. If not, they will be able to tell you who can. I just think it's so wrong that loans companies like this are allowed to make so much profit out of people who have an illness, or who are desperate. Good luck - I do hope you feel able to contact one of the debt help agencies. 

Fortunately my gambling is now under control, and have used gamcare to self exclude myself from all gambling websites. Interesting, I was not aware tht the gambling is recognised as an illness, thank you for that information. I am in the process of getting on top of all my debt, and would ideally want to get rid of the Loans2Go loan and pay if off, but the amount they are requesting is just too much and really makes no sense to pay under a year, 200% in interest , as payments of almost 1000 already made, and a settlement figure of around 3000 would translate as 200% above the amount of the principle. It seems to be too mych and I don't know how companies are allowed to do business in such a manner.

It absolutely makes sense to pay it off now, as it will save you over £1,000 in interest payments. Paying now means you pay £3k in total. Leaving it and paying it over the 18m term means paying £4,100.

eLdn123

DrEskimo, would love to pay it in full, but there is no way I could get over 2000£. 1000£ is something that I can sort, looking at it from a point of view that making around 100% in profit, should be something any company would like in under a year.

In the documentation I've received when starting the loan, the following are quoted :

1. The rates of interest which apply to the credit agreement. - Interest is charged at a simple fixed interest rate of 207.6 % per annum on the amount of credit for the term and is applied to the account, in full at the commencement of the agreement.

2. Annual Percentage Rate of Charge (APR). This is the total cost expressed as an annual percentage of the total amount of credit. The APR is there to help you compare different offers. - 1,013.2 %

I would assume that the correct rate is the one quoted at point 1, so 207.6%. And again they state that it is applied in full at the commencement of the agreement. Also would like to note that as per my understanding, in case of default, the full amount payable is request ( so principle + interest for the entire period ), and I had thought that when an account defaults, the amount payable is interest up to that point + principle, and this again is something that makes me think interest was front loaded.

Looks to me that the only solution would be to go to court on this if they would want to obtain a CCJ. Not sure how judges react to these situations, but paying 4000£ on a loan of 1000£ is just too much, and I know I agreed and was stupid, but was thinking I would get a big win and pay it back fast ( temporary insanity ).

DrEskimo

eLdn123 said:

DrEskimo, would love to pay it in full, but there is no way I could get over 2000£. 1000£ is something that I can sort, looking at it from a point of view that making around 100% in profit, should be something any company would like in under a year.

In the documentation I've received when starting the loan, the following are quoted :

1. The rates of interest which apply to the credit agreement. - Interest is charged at a simple fixed interest rate of 207.6 % per annum on the amount of credit for the term and is applied to the account, in full at the commencement of the agreement.

2. Annual Percentage Rate of Charge (APR). This is the total cost expressed as an annual percentage of the total amount of credit. The APR is there to help you compare different offers. - 1,013.2 %

I would assume that the correct rate is the one quoted at point 1, so 207.6%. And again they state that it is applied in full at the commencement of the agreement. Also would like to note that as per my understanding, in case of default, the full amount payable is request ( so principle + interest for the entire period ), and I had thought that when an account defaults, the amount payable is interest up to that point + principle, and this again is something that makes me think interest was front loaded.

Looks to me that the only solution would be to go to court on this if they would want to obtain a CCJ. Not sure how judges react to these situations, but paying 4000£ on a loan of 1000£ is just too much, and I know I agreed and was stupid, but was thinking I would get a big win and pay it back fast ( temporary insanity ).

Both interest rates quoted are correct, they are just refering to different types of interest rates. The first is a flat rate, the second is this flat rate converted into a APR to allow for comparisons with other loans, which are more commonly quoted in APR.

A flat rate is applied to the entire amount borrowed over the full term and does not take into account the decreasing balance over time. In your case, it's £1000*2.07 (flat rate of 207%)*1.5 (18months in years) = £3,100. Add the original capital borrowed and you get your £4,100 total amount payable.

Go to a personal loan calculator and put 1000% APR and you get the same total amount payable.

I'm not sure how much luck you will have in a court. The total amount payable and the interest rates are all given to you in black and white. You signed the contract agreeing to the terms. Are there grounds for irresponsible lending? Did you have lots of payday loans during the same period?

eLdn123

DrEskimo said:

eLdn123 said:

DrEskimo, would love to pay it in full, but there is no way I could get over 2000£. 1000£ is something that I can sort, looking at it from a point of view that making around 100% in profit, should be something any company would like in under a year.

In the documentation I've received when starting the loan, the following are quoted :

1. The rates of interest which apply to the credit agreement. - Interest is charged at a simple fixed interest rate of 207.6 % per annum on the amount of credit for the term and is applied to the account, in full at the commencement of the agreement.

2. Annual Percentage Rate of Charge (APR). This is the total cost expressed as an annual percentage of the total amount of credit. The APR is there to help you compare different offers. - 1,013.2 %

I would assume that the correct rate is the one quoted at point 1, so 207.6%. And again they state that it is applied in full at the commencement of the agreement. Also would like to note that as per my understanding, in case of default, the full amount payable is request ( so principle + interest for the entire period ), and I had thought that when an account defaults, the amount payable is interest up to that point + principle, and this again is something that makes me think interest was front loaded.

Looks to me that the only solution would be to go to court on this if they would want to obtain a CCJ. Not sure how judges react to these situations, but paying 4000£ on a loan of 1000£ is just too much, and I know I agreed and was stupid, but was thinking I would get a big win and pay it back fast ( temporary insanity ).

Both interest rates quoted are correct, they are just refering to different types of interest rates. The first is a flat rate, the second is this flat rate converted into a APR to allow for comparisons with other loans, which are more commonly quoted in APR.

A flat rate is applied to the entire amount borrowed over the full term and does not take into account the decreasing balance over time. In your case, it's £1000*2.07 (flat rate of 207%)*1.5 (18months in years) = £3,100. Add the original capital borrowed and you get your £4,100 total amount payable.

Go to a personal loan calculator and put 1000% APR and you get the same total amount payable.

I'm not sure how much luck you will have in a court. The total amount payable and the interest rates are all given to you in black and white. You signed the contract agreeing to the terms. Are there grounds for irresponsible lending? Did you have lots of payday loans during the same period?

During that time from a credit file perspective I had : 250£ with Littlewoods, 1000£ with Very, 450£ with Sunny, 2500£ overdraft fully used with HSBC, 3500£ credit card maxed out with HSBC, MyJar loan 150£, PayPal credit 250£, SafteyNet credit 500£ , H&T Pawnbrokers Loan don't recall the exact amount back then, Defaulted The Money Shop it was around 200£ or 300£.

I was thinking potentially about this case : https://www.financial-ombudsman.org.uk/files/113586/DRN4441181.pdf

DrEskimo

eLdn123 said:

DrEskimo said:

eLdn123 said:

DrEskimo, would love to pay it in full, but there is no way I could get over 2000£. 1000£ is something that I can sort, looking at it from a point of view that making around 100% in profit, should be something any company would like in under a year.

In the documentation I've received when starting the loan, the following are quoted :

1. The rates of interest which apply to the credit agreement. - Interest is charged at a simple fixed interest rate of 207.6 % per annum on the amount of credit for the term and is applied to the account, in full at the commencement of the agreement.

2. Annual Percentage Rate of Charge (APR). This is the total cost expressed as an annual percentage of the total amount of credit. The APR is there to help you compare different offers. - 1,013.2 %

I would assume that the correct rate is the one quoted at point 1, so 207.6%. And again they state that it is applied in full at the commencement of the agreement. Also would like to note that as per my understanding, in case of default, the full amount payable is request ( so principle + interest for the entire period ), and I had thought that when an account defaults, the amount payable is interest up to that point + principle, and this again is something that makes me think interest was front loaded.

Looks to me that the only solution would be to go to court on this if they would want to obtain a CCJ. Not sure how judges react to these situations, but paying 4000£ on a loan of 1000£ is just too much, and I know I agreed and was stupid, but was thinking I would get a big win and pay it back fast ( temporary insanity ).

Both interest rates quoted are correct, they are just refering to different types of interest rates. The first is a flat rate, the second is this flat rate converted into a APR to allow for comparisons with other loans, which are more commonly quoted in APR.

A flat rate is applied to the entire amount borrowed over the full term and does not take into account the decreasing balance over time. In your case, it's £1000*2.07 (flat rate of 207%)*1.5 (18months in years) = £3,100. Add the original capital borrowed and you get your £4,100 total amount payable.

Go to a personal loan calculator and put 1000% APR and you get the same total amount payable.

I'm not sure how much luck you will have in a court. The total amount payable and the interest rates are all given to you in black and white. You signed the contract agreeing to the terms. Are there grounds for irresponsible lending? Did you have lots of payday loans during the same period?

During that time from a credit file perspective I had : 250£ with Littlewoods, 1000£ with Very, 450£ with Sunny, 2500£ overdraft fully used with HSBC, 3500£ credit card maxed out with HSBC, MyJar loan 150£, PayPal credit 250£, SafteyNet credit 500£ , H&T Pawnbrokers Loan don't recall the exact amount back then, Defaulted The Money Shop it was around 200£ or 300£.

I was thinking potentially about this case : https://www.financial-ombudsman.org.uk/files/113586/DRN4441181.pdf

Very interesting. Yes, I would certainly seek advice on how to go about this. I don't think you need to go as far as court, but it certainly looks like a complaint to the FOS might be fruitful.

Apologies I don't have the knowledge to help you with that further, hopefully you can find other resources or other members can help.

Best of luck.

eLdn123

DrEskimo said:

eLdn123 said:

DrEskimo said:

eLdn123 said:

DrEskimo, would love to pay it in full, but there is no way I could get over 2000£. 1000£ is something that I can sort, looking at it from a point of view that making around 100% in profit, should be something any company would like in under a year.

In the documentation I've received when starting the loan, the following are quoted :

1. The rates of interest which apply to the credit agreement. - Interest is charged at a simple fixed interest rate of 207.6 % per annum on the amount of credit for the term and is applied to the account, in full at the commencement of the agreement.

2. Annual Percentage Rate of Charge (APR). This is the total cost expressed as an annual percentage of the total amount of credit. The APR is there to help you compare different offers. - 1,013.2 %

I would assume that the correct rate is the one quoted at point 1, so 207.6%. And again they state that it is applied in full at the commencement of the agreement. Also would like to note that as per my understanding, in case of default, the full amount payable is request ( so principle + interest for the entire period ), and I had thought that when an account defaults, the amount payable is interest up to that point + principle, and this again is something that makes me think interest was front loaded.

Looks to me that the only solution would be to go to court on this if they would want to obtain a CCJ. Not sure how judges react to these situations, but paying 4000£ on a loan of 1000£ is just too much, and I know I agreed and was stupid, but was thinking I would get a big win and pay it back fast ( temporary insanity ).

Both interest rates quoted are correct, they are just refering to different types of interest rates. The first is a flat rate, the second is this flat rate converted into a APR to allow for comparisons with other loans, which are more commonly quoted in APR.

A flat rate is applied to the entire amount borrowed over the full term and does not take into account the decreasing balance over time. In your case, it's £1000*2.07 (flat rate of 207%)*1.5 (18months in years) = £3,100. Add the original capital borrowed and you get your £4,100 total amount payable.

Go to a personal loan calculator and put 1000% APR and you get the same total amount payable.

I'm not sure how much luck you will have in a court. The total amount payable and the interest rates are all given to you in black and white. You signed the contract agreeing to the terms. Are there grounds for irresponsible lending? Did you have lots of payday loans during the same period?

During that time from a credit file perspective I had : 250£ with Littlewoods, 1000£ with Very, 450£ with Sunny, 2500£ overdraft fully used with HSBC, 3500£ credit card maxed out with HSBC, MyJar loan 150£, PayPal credit 250£, SafteyNet credit 500£ , H&T Pawnbrokers Loan don't recall the exact amount back then, Defaulted The Money Shop it was around 200£ or 300£.

I was thinking potentially about this case : https://www.financial-ombudsman.org.uk/files/113586/DRN4441181.pdf

Very interesting. Yes, I would certainly seek advice on how to go about this. I don't think you need to go as far as court, but it certainly looks like a complaint to the FOS might be fruitful.

Apologies I don't have the knowledge to help you with that further, hopefully you can find other resources or other members can help.

Best of luck.

Thanks for all your input so far, really appreciate it ! Forgot to mention beside those accounts ( those were the shortest terms being catalogue, pay day and credit cards ), I also have a loan with HSBC which back then I believe was around 9-10k mark remaining balance, and closed accounts ( which I understood are visible by loan companies ) with Cash on the Go and Quick Quid ( so pay day loan companies ). I am thinking about going to the FOS as well and complain regarding the high interest on the loan, as I do think from a legal perspective, as the defintiion of High Cost Short Term Credit ( according to the complaint against Loans2Go from the link ), was left broad on purpose by the FCA to catch companies which try to game the regulations. This from my perspective looks to be just that case. I am thinking of even writing to my MP, because although I agreed with the conditions at a time of sheer stupidity ( that's how I call my gambling phase ), I don't belive this model is fair and more people, potentially in more desperate situations or worse mental state than myself, may be caught up by them.

MalMonroe

Hi, I'm so pleased that you have your gambling under control - yes it definitely IS an illness and more and more research is being done about gambling addiction - but not enough unfortunately. There's this NHS link just for your info https://www.nhs.uk/live-well/healthy-body/gambling-addiction/ and there is also a gambling clinic (but only the one at the present time) based in London.  I do think you should try to get some help to get this loan overturned. You took it out at a time when you weren't well, obviously and you could do much worse than write to your MP. But you could also write to the Financial Ombudsman because this does seem like a classic case of irresponsible lending to me.

[Deleted User]

eLdn123 said:

It seems to be too mych and I don't know how companies are allowed to do business in such a manner.

They're only able to do it because customers agree to the terms. Their terms are legal, even if a very poor offer 

Once you understand the impact that interest has on both borrowing and saving, you'll make better decisions.

eLdn123

Deleted_User said:

eLdn123 said:

It seems to be too mych and I don't know how companies are allowed to do business in such a manner.

They're only able to do it because customers agree to the terms. Their terms are legal, even if a very poor offer 

Once you understand the impact that interest has on both borrowing and saving, you'll make better decisions.

I understand that, and agree with the point that I am responsible as well as I had accepted. But a gambler looking to make his big win, who already had debt and had defaulted, don't think should have been offered a loan at such a rate. I do take as well responsability, and as they have received the loan amount back, offering them 1000£ should be resonable, as it would equate to 100% in profit under 1 year. I will take this to ombudsman and see if anything can be done regarding this, if not, will need to decide what to do next based on input received as far. Thanks a lot.