Extortionate fees on Halifax loan payment holiday!

mrsTeardrop

I took out a £25000 Halifax personal loan in late feb to purchase a business (cafe unfortunately!) and new car suitable for carrying stock etc. Obviously have been unable to open the business so have had no income. Applied for a payment holiday and was granted 3 months but on the letters they are stating I will be charged £750 per month extra interest!! Actual payment is only £550 per month. Extra interest will be added and loan term extended but surely that’s too much??!?! 

Jeremy535897

What is the loan period and the interest rate? 

[Deleted User]

It's surely not. And it's not £750 a month extra interest.

They're not fees and they're not extortionate.  It's the interest rate you agreed to when you took out the loan. You've chosen to incur years of interest on a sizeable sum.

If you don't want to pay the interest for extending your loan, simply overpay.

dunstonh

Are you sure it says £750 Per month extra or that the cost of the debt equates to £750 for each month you go into authorised arrears.

Thrugelmir

Sounds as if you've misread the letter you've received. 

mrsTeardrop

It was 25,000 over 72 months @14.8%
the exact wording is “Because of the repayment holiday, we’ll add additional interest of £750 to your loan. This is an estimated amount for one month only. We’ll also extend the end if you’re loan to collect the postponed repayment(s) and the extra interest.
if you’ve asked for a longer repayment holiday, we’ll send you a separate letter for each month of the repayment holiday.”
I have 3 letters, one for each month and each has exactly the same wording so each month is treated as a separate item.

[Deleted User]

There you go.  Your interest doesn't go up to £750 a month - they're just advising you of the total additional interest you'll incur by having those three months in arrears.  Your monthly payments stay the same as they extend the term.

As I said before, you can reduce the interest dramatically by making overpayments.

dunstonh

the exact wording is “Because of the repayment holiday, we’ll add additional interest of £750 to your loan. This is an estimated amount for one month only. We’ll also extend the end if you’re loan to collect the postponed repayment(s) and the extra interest.

How did you turn that into £750 per month?  It does not mention the monthly payments.   It is, as I said, an indication of the extra amount of interest you will pay over the term for each month you take the authorised arrears. 3 months would be 3x £750.