Halifax Loan Help...?!

lupine79

Hello.
Okay, my mum took out a loan 15 months ago to pay off a large credit card debt. I went into the bank with her while she arranged it, and everything seemed fine..until this morning when my mum asked me to call up the bank to ask to have the monthly repayment lowered (she's been forced to take a job with a smaller wage than before).

I looked over the loan papers to see where we were up to and to my horror saw how much she owed! From an initial c/c debt of £8k, we'd somehow taken out an £18k loan! I remember asking the loan arranger several times how much the total loan was, and she wouldn't answer - she just kept repeating the monthly payments back at us, and the term. She made me feel pretty embarrassed - as though i wasn't understanding the answer she was giving me. I wanted to know the total amount borrowed, but she kept rephrasing the answer into monthly repayments. At no point was the figure £18,000 ever mentioned. The actual loan was £9k, with payment protection of about £2k, then interest on the loan AND the payment protection.

Two major things here - i feel absolutely stupid for not picking up on this at the time (my mum doesn't understand finance at all, so this was was my job) but more importantly i feel she's been completely mislead about the loan. I'm not sure we have any grounds here - it seems as though we've agreed to terms set by them, but i ABSOLUTELY believe we were mislead. Does anyone have any advice?

Many thanks in advance.

Sean

POSSETTE

i think you were missold too..i dont know what you can do ,but just hope someone comes on here with good knowledge of this..
sounds disgusting behaviour but i know it happens coz a car dealer tried the same with me..monthly figure only,hwe would NOT say how much we were paying for car, till i said i want to speak to manager.Even he tried it on too..then i said that "with my car as part ex, and money i will borrow off my dad,how much will it be" then he knew he wasnt getting a loan deal and answered me...I left shortly afterwards..best wishes and will keep an eye on this one...

CLAPTON

could you give all the details

loan amount
PPI
APR
fixed or variable
monthly payments
number of payment to be made

She may have a case for reclaiming PPI... why did she agree to take this.

POSSETTE

Just a query...when they put this 18k in your bank and your mum paid off the other debt at, i believe £8k...why didnt she notice the pther £10k in there? why is it still not in the bank?
if im understanding right..you went to borrow 8k,thought thats what you were borrowing when signing, then actually received 18k..??

lupine79

Ok, thanks for your replies on this.
Firstly, to Possette - just to clear up the loan details, the actual money received from the loan was £9400, but the total amount my mum now owes is £18169.20. she paid off the 8k loan, then had some left over to clear her overdraft and to live on.

Ok, for the actual loan details:

cash loan £9400
insurance loan £2764.81
total credit £12164.81
duration 86 months
total you pay for cash loan £14039.76
total amount you pay for insurance loan £4129.44
total amount for total loan £18169.20
12.2% apr

This is crudely copied from the loan papers....
I think the Bank recommended PPI, and it sounded quite dangerous to not have it.
If the bank had said, 'right - we'll lend you £9400 now, and you'll pay us back £18169.20, in nice plain english - i would have told them politely where to stick it.

Again, any help/advice is much appreciated.

lupine79

Also, The monthly payment is £216.18 - i'm not sure if its fixed or variable (i just got my mum to read this out over the telephone and she said she couldn't see any reference to either...)

somabc

lupine79 wrote: »

Ok, thanks for your replies on this.
Firstly, to Possette - just to clear up the loan details, the actual money received from the loan was £9400, but the total amount my mum now owes is £18169.20. she paid off the 8k loan, then had some left over to clear her overdraft and to live on.

Ok, for the actual loan details:

cash loan £9400
insurance loan £2764.81
total credit £12164.81
duration 86 months
total you pay for cash loan £14039.76
total amount you pay for insurance loan £4129.44
total amount for total loan £18169.20
12.2% apr

This is crudely copied from the loan papers....
I think the Bank recommended PPI, and it sounded quite dangerous to not have it.
If the bank had said, 'right - we'll lend you £9400 now, and you'll pay us back £18169.20, in nice plain english - i would have told them politely where to stick it.

Again, any help/advice is much appreciated.

Sorry but I don't think there is anything you can do. If the applicant signed the loan papers and agreed these figures then the loan is valid. They are quite deviously front loading the interest, so it is applied at the start of the loan and there is therefore no benefit for you to settle early.

You could try to argue that the PPI was mis-sold and that the advisor did not fully explain the loan to you or your mum. Given the current scandal with PPI it may be fairly straight forward to get this removed but I wouldn't hold out much hope for the loan itself to be cancelled due to miselling.

It is very important before you sign the credit agreement to check BOTH the APR and the TOTAL AMOUNT TO BE REPAID. It is very common to look at a loan at a rate of say 10% and say that looks alright but as you have found out you could end up paying over double the amount you borrowed back! If you think you might settle early also check when the interest is applied throughout the term. Try and take a fully flexible loan such as egg in the future.

CLAPTON

I don't think you can do much about the basic loan... I'm afraid that if you borrow over 7 years then you pay a lot of interest.. that's just how it works
Sadly most people don't know that.

And by the way the interest isn't front loaded and you will get money back if you can settle early. However actually 12.2 % isn't a bad rate I'm afraid and she may not be able to do better.

However, I think you may very well have a good case to reclaim all the PPI.

I would suggest you read the threads about reclaiming PPI.

Do everything in writing. Keep copies of everything. If you dont understand their replies come back here and ask.

NEVER believe anything said on the phone or in person by a bank until you also see it it writing and have had time to read it.

NEVER sign anything in a bank unless you have previously had the contract in writing and have studied it.

lupine79

Thanks again for your input. I'll go and read the PPI stuff and act accordingly. Will keep you posted!

Sean

POSSETTE

Thank you for clarifying. Please do a reclaim of PPI.You were definately misled on it.best wishes