Hi I'm looking for some advice about a secured loan
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Wren11
Posts: 3 Newbie
Hi I am looking for some advice on a secured loan which I took out about 12 over 20 years through a broker in the UK, the interest rate has gone up quite a bit during this time and even when the interest rate dropped very low it didn't lower on the loan, when I rang the company to ask why my rate wasn't going down in line with government rates I was told that my loan was linked to the American Bank rates! and that it was higher than UK. I assumed I was talking out the loan based on UK rates not America! Now 12 years on I still owe almost as much as I borrowed, I think I was mis sold this loan but been told I can't do anything about it because its secured. Advice please.
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Comments
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What asset or assets is the loan secured on? Have you explored refinancing the loan with another lender? Could you take out another loan, secured or unsecured in order to repay this one?0
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It is secured on the house, can't borrow more to pay off my circumstances are different now
as my husband had to retired on I'll health and I'm his carer and not enough income coming in only just managing to pay mortgage. .0 -
So you have a conventional mortgage and you are referring to a second loan taken out against your home? Will you be in a position to pay off the loan at the end of its term?
Otherwise, TBH, it's hard to come up with a solution that wouldn't involve you selling your home. You could explore your options with Citizen's Advice who you could show the loan agreement, but I don't think it is likely the loan will be unenforceable. It is also unlikely that this loan was unsuitable when you took it out over 12 years ago and it is your change in circumstances that has made it unaffordable now.0 -
It's not the fact that I can't afford to pay it I am paying. Its the fact that I'm paying more on a loan for 20,ooo than my mortgage over the same time. Yes at the end of term it will be paid but I feel like I was mis informed because I took the loan on from a UK company, but being charged a higher American interest rate. Doesn't seem right. The loan went up, but my mortgage actually came down when interest rate dropped.0
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Here is a chart of US interest rates:
So the interest has only recently become higher than the UK rate, and it was slightly lower than the UK rate between 2008-2015.
It is not at all unusual for loans to be charged at interest rates that are completely disconnected from central bank rates. While others track bank rates. You make your choice based on what you think is best. If you make a bad decision, that doesn't qualify as misselling in and of itself. What do the loan terms say about changes to the interest rate you are charged?
Also, out of interest, what is the rate you are currently paying? It looks as though competitive loans are coming in at ~4-5%, but a loan taken out a long time ago wouldn't be expected to compete against these rates. From what I can see, there were supposedly competitive loans on offer in 2008 that were fixed at double this rate - an people taking out those loans would not have a misselling claim because interest rates stayed low for longer than expected.0
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