Santander Loan - I'VE BEEN CHARGED ALMOST 3x MORE THAN I SHOULD HAVE!! Have you?

FunnyFakingSexDirt

I noticed yesterday that my £18,000 loan was being charged interest of 7.9% APR instead of the 2.8% I signed up for!

I took out a loan with Santander in February to pay off my car finance.

I looked into making an over payment yesterday and in doing so I inadvertently clicked the 'more details' button for the loan.
In my horror I noticed that the APR was at 7.9%, and the total to be repaid was £1000s higher than it should be.
I called them up straight away, having found the acceptance email for the 2.8% loan I thought I was getting, and the loan agreement that you have to save/print before you sign it off. They are now looking into it, and I have to wait another 6 days to receive a letter explaining what has happened. Within that time, I am likely to have to make another payment at 7.9% APR!

To explain why it took me this long to realise: the agreement I signed clearly stated i am paying 2.8% (in bold twice), however it appears the repayments and total to be repaid were calculated using 7.9% APR, which I did not notice.

I wonder if this has happened to anyone else? It might be worth checking!

What are my rights in this situation?

bradders1983

Well your rights are to get them to look at it (which they are) and wait to see what happens.

kazwookie

You need to give them time to sort it out first, when they come back you to with answers then you need to discuss with them any reduction / why was I not notified / do I get any interest on an overpayment I have made / how much to I owe in total / any compensation etc.

Until you know all the facts no one in the world can tell you what your rights are.

I hope they give you a good explanation of any errors

FunnyFakingSexDirt

Yes that is true, I imagine any over payments i have made will be deducted from the loan. 
I guess I was more wondering if I should be due any compensation for wrongfully overpaying for 7 months.

The main thing is that it is corrected, and that it is brought to light. Hopefully it was a one off error, and others have not been unknowingly paying much higher interest on their loans.

foxy-stoat

Calm down and wait for them to get back to you.  If you took out the loan for 5 years say then you would of overpaid by around £2,000 in interest
.
As you didnt notice that the repayments for the last 7 months were £40 more than they should of been then another payment of the extra isn't going to hurt your finances.

Once they realise their mistake at worst you would of paid a bit more off the capital so their mistake has actually saved you money.

Assuming that the "acceptance letter" your referring was the actual Credit Agreement they sent you once all the credit checks and underwriting had been carried out.  It wouldnt be the first time folk on here thought they had already got pre-approved for the headline rate*.


* subject to credit checks and personal status etc etc.

FunnyFakingSexDirt

Thank you for taking your time to reply @foxy-stoat
I am very calm, thanks.
The main reason I posted this was to alert others that may have been unaware that they were being overcharged and were overpaying on their loans.
If you would have taken the time to read my post properly, you would have seen that I mentioned a loan agreement that stated the 2.8% APR twice. So unlike other "folk on here", I was definitely accepted for the rate I stated.
Although you are obviously completely unaware of my financial situation, you are correct that the extra £40 "isn't going to hurt your finances", but you are missing the point, that £40 may be hurting others, and I would much prefer it in my pocket than theirs.

This could very easily have happened to someone who isn't (slightly) savvy to financial things like this and they may end up over paying with money that they can not afford to do so with. 

Why would anyone be so quick to stick up for a bank anyway   

bradders1983

I dont see anyone sticking up for a bank tbf.

foxy-stoat

I did take the time to read and good on you for alerting other folk that Santander have made a mistake on your agreement.  Many on here only find out that they have accepted the higher rate than the banks headline rate on the advertising blurb on month 1 or before they signed the agreement.  Some even sign an "agreement" at the headline rate with a paragraph stating this may not be the rate you get offered and never give it another thought.

I thought that you were not calm as you were horrified that you found out they were overcharging you and the use of !...seems not so apologies for that.

Looking at the bigger picture though, if you had been over paying by a total £280 over the last 7 months and you wanted the money back in your pocket instead of theirs, they have actually been robbing themselves as when they rectify their error they would have to work out how much interest to charge on the basis that you have been making over payments for the last 7 months at £40 a month, so you have saved money on the interest you would of been paying.  So its a win for you, and they may well throw in a voucher for your inconvenience.

ToxicWomble

So you went went and looked with the intent of making some over payments to find out that you have already been overpaying - bonus 

FunnyFakingSexDirt

ToxicWomble said:

So you went went and looked with the intent of making some over payments to find out that you have already been overpaying - bonus 

Overpaying on interest. So, no, not really.

FunnyFakingSexDirt

foxy-stoat said:

I did take the time to read and good on you for alerting other folk that Santander have made a mistake on your agreement.  Many on here only find out that they have accepted the higher rate than the banks headline rate on the advertising blurb on month 1 or before they signed the agreement.  Some even sign an "agreement" at the headline rate with a paragraph stating this may not be the rate you get offered and never give it another thought.

I thought that you were not calm as you were horrified that you found out they were overcharging you and the use of !...seems not so apologies for that.

Looking at the bigger picture though, if you had been over paying by a total £280 over the last 7 months and you wanted the money back in your pocket instead of theirs, they have actually been robbing themselves as when they rectify their error they would have to work out how much interest to charge on the basis that you have been making over payments for the last 7 months at £40 a month, so you have saved money on the interest you would of been paying.  So its a win for you, and they may well throw in a voucher for your inconvenience.

No worries, appreciate the apology.
I'm not quite sure what you mean, when you say it's a win for me.
The main point here is that if I would not have clicked on the additional details of my loan on my internet banking, I, and possibly many others could have continued to pay off a loan at a substantially higher rate that what was agreed to.

The only win, was that I noticed it, and hopefully it'll all be rectified.