Loans 2 go have i been charged too much interest?

haylz263

I stupidly took out a loan with loans 2 go. It was through a third party website so when I agreed to the loan I didnt realise it was over an 18 month period and the extortionate interest rate that would come with. A £500 loan over 18 month ment me paying back over £1900. I know there are rules they have to adhere to if the loan is under a 12 month period. I paid back 3 months of £114 and then asked for an early settlement fee wich was £637.31p. That amounts to a total of £980 paid back. I had the loan for 3 and a half months. My question is they charge 770% apr so is it right for a loan of £500 over a 3 and a half month period to be charged £480 interest? Please any information on this would be greatly appreciated.

Thanks
Hayley

mcpitman

At that ridiculous interest rate, that sounds about right.

Loans are calculated on a reducing balance, so your monthly payment at the start is paying more interest and less capital at the start of the loan. Only 3 months in, those numbers are easily possible.

sourcrates

Whatever the interest rate is, you have the choice of either yea or nay, and you chose yea, so end of story unfortunately.

Payday loans are capped so that you should never pay back more than double what you originally borrowed, however, these are not payday loans, these are repaid over 18 months, so the creditor can basically charge whatever interest they want to, and you have the choice to either accept that, or to decline it.

You chose to settle the loan early, so they would apply whatever criteria they use under those circumstances, to work out your settlement figure.

If your unhappy, or don`t understand the figures, then ask them for a written breakdown of how it was calculated.

Ebe_Scrooge

Actually, if the APR really is 770% then I think you've paid quite a bit less interest than you should have - your figures don't add up (the basic headline of paying back £1900 for a £500 loan).  As above, you need to ask for a breakdown of exactly what the settlement figure represents.

haylz263

Just want to add this company took its first payment of £114 the day after I took out the loan so only got a £386 loan

[Deleted User]

That explains why your settlement figure was so low, as you immediately reduced the outstanding debt. 

Good result.

TrickyDicky101

I make that an effective annualised rate of interest (APR) of 2,054% which is impressively high.  I make it a periodic rate of 29% and therefore a non-compounding annualised rate of 350%.  That assumes a total of 18 repayments of £114 (repayments due at the start of each period which is what you imply given the first one was taken straight away).  Definitely look to your loan documentation.

I can't imagine why you would accept such a loan in the first place.

haylz263

This wasn't the loan I thought I was getting. I was applying through a third party website. I was agreeing to one that was paid over a shorter term. Put all details in and was redirected these saying it was accepted. I didnt realise till afterwards what the situation was. There was no contract information sent to me nor anything about what the repayments were. I had to request it. Whilst I was doing this the very next day they took a payment of £114 so was left with £386 i hadn't even had the loan 24 hours. Its a very costly mistake, one I will never make again. I was very naive I will never be going anywhere near these type of people again

[Deleted User]

haylz263 said:

This wasn't the loan I thought I was getting. I was applying through a third party website. I was agreeing to one that was paid over a shorter term. Put all details in and was redirected these saying it was accepted. I didnt realise till afterwards what the situation was. There was no contract information sent to me nor anything about what the repayments were. I had to request it. Whilst I was doing this the very next day they took a payment of £114 so was left with £386 i hadn't even had the loan 24 hours. Its a very costly mistake, one I will never make again. I was very naive I will never be going anywhere near these type of people again

Who took a payment of £114?  Loans2Go or the third party website (broker) that directed you towards Loans2Go?

superbigal

Did you not also get charged a fee by the introducer ? or even worse subscribe.  Best double check for other money going "missing". 

haylz263

Loans 2 go took their first payment the day after giving me the loan. They took it early hours next morning hadnt even had the loan 24 hours. Third party website didn't take a fee I checked.