118 118 Loan - HELP

dgrant88

I stupidly took a loan of £2000 out with 118 118 back last year.


After 10 months of paying £159 per month I called them to enquire about settling the outstanding balance. It was then I was told that to settle the loan I would need to pay £1780.

The balance on my account is showing as £2226 however this is including the interest that I would be paying if I was to continue with my remaining payments.

I am at a loss as to how at this point in time, I have only paid around £220 of the capital in terms of the loan. I understand that the amount of interest charged at the beginning of the loan may be higher, but 10 months on, paying the loan off in full would require almost as much as I originally received.

I spoke with the advisor for some time and she mentioned on several occasions that the interest was “front loaded” which I didn’t think happened any more.

Anyway, where do I stand here? Do I have any actions I can take or does anybody know if there is some sort of negotiations that can be carried out?

Any help is greatly appreciated as I’m at my wits end here.

dgrant88

It really is unbelievable when I look at it… I’ve paid £1590 and only £220 has went to paying off any capital.

Just shy of 14% of my payments

DrEskimo

What is the interest rate and how long is the repayment term?

y3sitsm3

It's really not that bizarre at all.  118 offer extremely high rate loans.  That means you'll pay off very little capital at first.

Using https://www.theguardian.com/money/loan-repayment-calculator-interest-rates and using 49.9% APR over 36 months shows very little repaid by month 10.  That doesn't align with what you're paying so either your APR is higher or the term is shorter but it's a very nice example of how much capital is paid off over time.

As DrEskimo says you need to give us the APR and term to be sure, but on the face of it there is nothing wrong here, and they'll almost certainly not be willing to negotiate a discount with you.

dgrant88

DrEskimo said:

What is the interest rate and how long is the repayment term?

It says the APR is 99% on my agreement and that the interest rate is 71.3%

The term is for 24 months

y3sitsm3

Their numbers are bang on.

The capital is £1545.28.  Add a couple of months interest for early repayment (£100-ish per month) and you have your £1780 figure.

That interest rate is astronomical.  With all due respect, what were you thinking?!?

Can you make overpayments?

[Deleted User]

dgrant88 said:

Anyway, where do I stand here? Do I have any actions I can take or does anybody know if there is some sort of negotiations that can be carried out?

You stand paying the settlement figure or blowing more of your future income on keeping the loan running.. So do your future self a massive favour and clear it now.

You can negotiate once you've missed several payments, but then you screw your credit files, which is even more expensive in the long run.

Get out now while you have the chance.

dgrant88

y3sitsm3 said:

Their numbers are bang on.

The capital is £1545.28.  Add a couple of months interest for early repayment (£100-ish per month) and you have your £1780 figure.

That interest rate is astronomical.  With all due respect, what were you thinking?!?

Can you make overpayments?

I know, it was absolute lunacy from me. My aim was to pay it off in full after a couple of months but things spiralled.

I’ll be paying it off in full tomorrow

y3sitsm3

dgrant88 said:

y3sitsm3 said:

Their numbers are bang on.

The capital is £1545.28.  Add a couple of months interest for early repayment (£100-ish per month) and you have your £1780 figure.

That interest rate is astronomical.  With all due respect, what were you thinking?!?

Can you make overpayments?

I know, it was absolute lunacy from me. My aim was to pay it off in full after a couple of months but things spiralled.

I’ll be paying it off in full tomorrow

It might be more prudent to pay almost all of it off and let them take the final payment via the normal method, you won't have to pay the early repayment charge then.

dgrant88

y3sitsm3 said:

dgrant88 said:

y3sitsm3 said:

Their numbers are bang on.

The capital is £1545.28.  Add a couple of months interest for early repayment (£100-ish per month) and you have your £1780 figure.

That interest rate is astronomical.  With all due respect, what were you thinking?!?

Can you make overpayments?

I know, it was absolute lunacy from me. My aim was to pay it off in full after a couple of months but things spiralled.

I’ll be paying it off in full tomorrow

It might be more prudent to pay almost all of it off and let them take the final payment via the normal method, you won't have to pay the early repayment charge then.

Good advice, thanks 

y3sitsm3

dgrant88 said:

y3sitsm3 said:

dgrant88 said:

y3sitsm3 said:

Their numbers are bang on.

The capital is £1545.28.  Add a couple of months interest for early repayment (£100-ish per month) and you have your £1780 figure.

That interest rate is astronomical.  With all due respect, what were you thinking?!?

Can you make overpayments?

I know, it was absolute lunacy from me. My aim was to pay it off in full after a couple of months but things spiralled.

I’ll be paying it off in full tomorrow

It might be more prudent to pay almost all of it off and let them take the final payment via the normal method, you won't have to pay the early repayment charge then.

Good advice, thanks 

To be clear, almost all of it refers to the capital, so perhaps £1500