Black Horse Finance & Holiday Payments - Urgent Help Needed!

ChocksterNo1

Hi

I have had a Black Horse Finance Loan since 2004. the term of the loan was over 60 months. On occassions I have taken a holiday payment (8 times over 4 years).

I was enquiring with their Customer Services Department about getting new funds when the Cust Serv Rep informed me that the term of my loan was now 94 months due to the holiday payments I had taken. On 2 occasions, I took a holiday payment, they added on 9 months to my loan. My regular loan repayment is £136, I calculated that as a result of this extra 9 months, they were asking to repay an extra £1224, an increase of 900%.

When I asked for these holiday payments, I was informed I could either add it onto the end of my loan + interest, or pay a small amount extra over the course of my loan. If I had been told that a holiday payment beinf added to the end of my loan was going to increase my loan by 9 months, I would have said no.

I feel I was badly advised. I was told I could complain to the Official Written Complaints Handling team. Has anyone else encountered this issue, how did you get it resolved? Could I write to the FSA to complain?

Any advice greatly appreciated as this is causing great upset!

Thanks

CLAPTON

how long were the payment holidays ?

jonesMUFCforever

Work it out for yourself - if you have a holiday then the interest continues to accrue (and more of it because there is no repayments to reduce the balance).
So any holiday in the first couple of years will radically increase the time it takes to repay the loan if you don't increase the repayment.

IMO your mistake was to take the repayment holidays.

Sorry but it is my opinion that you have no cause to complain.

ChocksterNo1

1 month at a time. So for each 1 month break, they added 9 months to my loan. Seems a bit extreme.

ChocksterNo1

to JONESMUFC - surely they must give advice as to the outcome, i.e. if you take a holiday payment, we will added 9 months to your loan. If they had advised this I would have never taken holiday payment.

CLAPTON

without knowing the full details (amount borrowed, APR ) its impossible to say whether the increase in timescale is reasonable although at first sight 9 months does seem a little long.

do you not receive regular statements showing how much you owe?

jonesMUFCforever

Who asked for the holiday?
How much did you borrow and over what term and what is the APR they are charging you?
Can you find the paperwork that Black horse would have sent you when you applied for the holidays - this would have been done if the original loan was done under the CCA. This will give you information - the gist of is that if you take out a holiday then the repayment date is 'stretched' by more than one extra repayment.
They also gave you an option of increasing your repayments - why did you not take this up?

In fact each month's break in repayments means interest accrues for 2 months before payments start again eg you pay on 1st April say, holiday in May and start repaying again on 1st June = about 60 days when interest is added with no reduction in balance.

ChocksterNo1

my APR is around 39%

I don't receive regular statements ( don't receive any statements, never have received one).

I understand that a holiday payment will incur interest + the 1 payment break, so would have assumed 1 + 2 months interst, i.e. increase term of loan by 3 months.

Twice they increased my loan by 9 months, whereas other times they only increased by 4 months. When I receive the paperwork from Black Horse, all they state is a 2 sentence paragraph saying my holiday payment for month xxx has been actioned and they will add onto end of loan.

When I phoned cust Serv to ask for the possibility of a loan payment, they told me, yes, I could have one, have 2 options, add it onto loan, or pay extra back. They didn;'t advise me as to what the extra cost would be for either option. Basically said it was no problem to arrange holiday payment, I only found this out when I spoke to the cust serv agent the other day, when she advised me to write a complaint.

Has anyone else come acorss this problem, is there any action I could take? Could I ask Black horse to reduce my loan (for the 2 times they increased by 9 months) from the 9 months extra to only 4 months extra, thus cutting my loan by 10 months?

Thanks for your advice, wasn't sure who I could speak to?

CLAPTON

it would seem to me that a months payment holiday shouldn't cause more than 4 or 5 months extension to the loan period... so if you have had 4 period of one month I can't see why it should extend more than about 20 months


unfortunately you have taken out a loan with extortionate rates of interest and combined that with payment holidays.

I think you need to write asking for a full statement of the a/c and see exactly what happened.