Extra interest added

Lucygirl1998

HI
Some years ago we took out a secured loan with GE money, originally for £27K and then kept adding to it until it built up to 50K borrowed. foolish we now know but at the time we didnt realise how stupid we were being. A few years later we were struggling with the payments, however I have got to say we have never not paid back all our money borrowed or shirked the responsibility of doing so, however between the years of 2007 and 2012  we were struggling to meet the payments at times and  we did miss an odd payment, we then would pay that back over the next 3 months etc, we never got to the stage where they sent anyone out to speak to us or anything and it never went beyond a month maybe a month and a half at most. Hubby and I worked hard to get our finances on track and since 2012 have had no arrears on anything and worked to getting everything paid off. 
We have been in a position this last few years to pay odd lump sums off the GE money loan as without the lump sums it never seemed to reduce much. we were down to a balance of 14.5k and last week i phoned them to pay another 6.5K off the balance. While on the phone the person I spoke to said right what do you want to do then, I said I dont know what you mean what do I want to do, she said with the 6.5K because your account is totally up to date and  the balance of your loan is 4K and your wanting to 6.5K, I said I didnt understand I thought it was 14.5 outstanding and she said the actual loan outstanding is 4K but you had 10.5K extra interest added and some charges for the arrears we had between 2007 and 2012 , I was totally flabbergasted by the amount to be honest and was shocked , flipping hec that seems a lot of money, I asked if the extra interest was in addition to the normal interest and she said yes, I mean I would have expected a little bit of extra interest but 10.5K, I am not exaggerating when I say it was some payments we missed not months on end and were never more than a month or month and a half in arrears at any one time.  I would also  like to add that our debt was sold to Prestige Finance a few years ago but not when it was arrears and after 2012 and we have been paying it off with them over the years, we are actually on schedule to pay it off earlier than its end due date due to the overpayments we have made.

Anyone any thoughts other than serve yourself right for missing extra payments because right now I am so annoyed at myself for doing so.

Herzlos

Compound interest means that a missed payment with fees could really add up to something horrifying 9 years later.
I'm assuming this was an unregulated loan at the time so I'm not sure you'd have any legal recourse, but you should be able to complain to them and ask to see how it was calculated.

sourcrates

Secured loans tend to attract variable interest rates, and if you miss a payment, or are late, then default fee`s can be applied, and these fee`s also attract interest at a variable rate themselves, so things can get very messy, very quickly.

Having said that, I fail to see what your problem is now, after all you said you were expecting the balance to be roughly 14k, and that`s more or less what it is.

If you feel this interest was added wrongly, then complaints procedures are in place to help you, I would suggest you start there.