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    • mocoates
    • By mocoates 12th Sep 18, 12:08 PM
    • 5Posts
    • 1Thanks
    mocoates
    Crippling Nemo Loan desperate for help
    • #1
    • 12th Sep 18, 12:08 PM
    Crippling Nemo Loan desperate for help 12th Sep 18 at 12:08 PM
    Hi all, my wife and I stupidly took some advice from a financial consultant 8 years ago to help consolidate our credit card debts in to one easily manageable loan. Which was fine and we got the paperwork and it all sounded ok. It was a secured loan with Nemo personal finance. How sick do we feel now? We borrowed 35k and where set up with a payment of 300 per month for 25 years.

    We really didn't think about it at the the time, but now looking back at the paperwork, we can see that the consultant got paid over 3000 just for signing us up (so no question about where his loyalties where). On top or that, we are paying back over 3 times the amount we borrowed. We have pretty much paid back the initial amount borrowed, but now we still ow them over 70k.

    We have missed payments in the past but have managed to keep up with them despite problems along the way, all the time they are charging us an extra 45 for the phone call consultation each time we miss a payment and adding it to our loan, I dread to think how many thousands extra that is costing us.

    We feel really sick that we still owe twice what we have borrowed, something doesn't feel right, we have 2 small children and we really are struggling to keep up with what is probably a comparatively small payment now to some people. But in the scheme of things its really crippling us.

    Can anybody give any advice or help please? I'm not getting any younger and I will be over 65 years old by the time this is finished.

    Thanks in advance if there is any any slim chance of getting some relief from this pressure.
Page 1
    • BoGoF
    • By BoGoF 12th Sep 18, 12:16 PM
    • 3,467 Posts
    • 2,777 Thanks
    BoGoF
    • #2
    • 12th Sep 18, 12:16 PM
    • #2
    • 12th Sep 18, 12:16 PM
    What's the APR on the loan?

    Do you own your home?
    • zx81
    • By zx81 12th Sep 18, 12:17 PM
    • 18,618 Posts
    • 19,871 Thanks
    zx81
    • #3
    • 12th Sep 18, 12:17 PM
    • #3
    • 12th Sep 18, 12:17 PM
    Ask for a settlement figure, as it seems you have misunderstood how the loan works.

    You don't owe them 70k - it will be an amount somewhere lower than 35k (unless your missed payment fees add up to another 35k).

    Once you know that, you can see whether you can move anything to a lower rate.
    Last edited by zx81; 12-09-2018 at 12:20 PM.
    • Pixie5740
    • By Pixie5740 12th Sep 18, 12:31 PM
    • 12,929 Posts
    • 18,585 Thanks
    Pixie5740
    • #4
    • 12th Sep 18, 12:31 PM
    • #4
    • 12th Sep 18, 12:31 PM
    Hi all, my wife and I stupidly took some advice from a financial consultant 8 years ago to help consolidate our credit card debts in to one easily manageable loan. Which was fine and we got the paperwork and it all sounded ok. It was a secured loan with Nemo personal finance. How sick do we feel now? We borrowed 35k and where set up with a payment of 300 per month for 25 years.

    We really didn't think about it at the the time, but now looking back at the paperwork, we can see that the consultant got paid over 3000 just for signing us up (so no question about where his loyalties where). On top or that, we are paying back over 3 times the amount we borrowed. We have pretty much paid back the initial amount borrowed, but now we still ow them over 70k.

    We have missed payments in the past but have managed to keep up with them despite problems along the way, all the time they are charging us an extra 45 for the phone call consultation each time we miss a payment and adding it to our loan, I dread to think how many thousands extra that is costing us.

    We feel really sick that we still owe twice what we have borrowed, something doesn't feel right, we have 2 small children and we really are struggling to keep up with what is probably a comparatively small payment now to some people. But in the scheme of things its really crippling us.

    Can anybody give any advice or help please? I'm not getting any younger and I will be over 65 years old by the time this is finished.

    Thanks in advance if there is any any slim chance of getting some relief from this pressure.
    Originally posted by mocoates
    Based on the information provided I'm guessing that the interest rate is about 9%.

    When you start making your loan repayments most of the payment goes towards the interest and a small amount towards the capital repayment. The next month a little bit less goes towards the interest and a little bit more towards the capital and so on until the loan is repaid in full.

    If you had made all your payments on time then after 8 years you would still owe around 30k for a 35k loan over a 25 year term. At the end of the 25 year term you would have repaid 90k (300 x 25 x 12) but you have missed payments so you will be accruing more interest and late payment charges which means you will end up repaying more than 90k.

    There are ways of dealing with unsecured debt that don't involve losing your home. Unfortunate the same options don't exist for secured debt because if you can't/don't pay the lender can call on the security (your home) instead.

    Do you have any equity in your home? Would you be able to remortgage to release enough equity to clear the Nemo loan?
    • Gaz83
    • By Gaz83 12th Sep 18, 2:28 PM
    • 3,543 Posts
    • 6,752 Thanks
    Gaz83
    • #5
    • 12th Sep 18, 2:28 PM
    • #5
    • 12th Sep 18, 2:28 PM
    Surely even without missing payments you'd have realised you were paying back 90,000 over the course of the loan when you first took it out?
    "Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."
    • foxy-stoat
    • By foxy-stoat 12th Sep 18, 2:43 PM
    • 2,667 Posts
    • 1,533 Thanks
    foxy-stoat
    • #6
    • 12th Sep 18, 2:43 PM
    • #6
    • 12th Sep 18, 2:43 PM
    Do you have a monthly budget and can you afford to overpay this debt?
    Do you have other credit cards or loans?
    Any chance of downsizing the house?
    Can you down value your car(s)?
    Have you done the PPI refund thing yet on all your past and present debts?
    Sell everything that you dont need and overpay where you can.

    All of that should of been the course of action you should of taken 8 years ago, but its not too late to start.
    • dealer wins
    • By dealer wins 12th Sep 18, 3:45 PM
    • 5,980 Posts
    • 11,533 Thanks
    dealer wins
    • #7
    • 12th Sep 18, 3:45 PM
    • #7
    • 12th Sep 18, 3:45 PM
    Classic consolidation problem.

    Im guessing that you had loan, card payments for much more than the 300 pm that when you took the loan and were struggling then.

    In theory you would be able to easily afford the 300, but over the years have now got more financial commitments on top of the 300 bringing you back to where you were in the first place.

    The only thing you can do is to try to really cut back on outgoings as much as possible, and or do more work.

    As its a secure loan you are limited even more as if you stop paying your home is at risk.

    I would post on the debt free wannabe board and do a full SOA.

    Dont focus on what the consultant got or didnt get, thats the standard fee for using a consultant/broker, and if they didnt get it the loan company would have anyway.
    Choose life
    • macman
    • By macman 12th Sep 18, 5:22 PM
    • 42,686 Posts
    • 17,954 Thanks
    macman
    • #8
    • 12th Sep 18, 5:22 PM
    • #8
    • 12th Sep 18, 5:22 PM
    Surely even without missing payments you'd have realised you were paying back 90,000 over the course of the loan when you first took it out?
    Originally posted by Gaz83
    You would have thought so, but when people have 35K of debt and someone offers them a way to convert it to an 'easily manageable' payment of 'just 300 a month', then common sense and simple maths goes out the window. 300x12x25=90K. People focus on the monthly payment, not the term or the total cost. 9% APR is not unreasonable-the problem is that it's over 25 years.
    The real problem here is that the OP has traded unsecured debt for secured, so is in danger of losing their home if they default.
    Last edited by macman; 12-09-2018 at 5:24 PM.
    No free lunch, and no free laptop
    • Years of debt
    • By Years of debt 13th Sep 18, 10:14 AM
    • 48 Posts
    • 18 Thanks
    Years of debt
    • #9
    • 13th Sep 18, 10:14 AM
    • #9
    • 13th Sep 18, 10:14 AM
    You’re going to be stuck with the payments until the term ends as the debt is secured. Your only two options are - ask for a settlemnt figure and borrow that at a lower APR pay off the secured debt. Due to your age and what you currently owe already, I doubt you will get a unsecured loan for the amount you need.

    Second option - Remortgage, release equity and pay off the settlement figure.

    Bankruptcy would give you the financial release but wouldn’t be beneficial considering you’re a home owner.

    StepChange, citizens advice or national debt line really helped me with my financial problems. Please ring them as they do fully explain everything & will offer you the best advice for your situation!
    • foxy-stoat
    • By foxy-stoat 13th Sep 18, 10:47 AM
    • 2,667 Posts
    • 1,533 Thanks
    foxy-stoat
    OP, any answers to the questions folk have asked?
    • mocoates
    • By mocoates 13th Sep 18, 2:24 PM
    • 5 Posts
    • 1 Thanks
    mocoates
    sorry I hadn't realised there where so many replies Thank you
    I think we may look in to adding it on to our mortgage (which I have just managed to halve as it was with the bank of ireland at nearly 4%) I think I will talk to them ad see what we can do.

    A few facts:
    It is a secured loan
    Bankruptcy is not an option
    downsizing is not an option
    yes we have lots of other loans, I'm self employed and business isn't great at the moment
    the apr was about 9.5% (which we thought was pretty cheap)
    There is plenty of equity in our house

    Thanks for all your replies, it's food for thought
    • Tarambor
    • By Tarambor 13th Sep 18, 2:29 PM
    • 3,549 Posts
    • 2,622 Thanks
    Tarambor
    yes we have lots of other loans, I'm self employed and business isn't great at the moment
    Originally posted by mocoates
    Might want to consider getting a job, even a part time one to run alongside your business until things pick up.
    • attila_
    • By attila_ 14th Sep 18, 4:05 AM
    • 430 Posts
    • 179 Thanks
    attila_
    Hey OP sorry to hear about your situation - not knowing the t&cs but just a thought:

    Any chance you could release equity from property to pay off loan plus early exit fees?

    In terms of job, if self employed role is taking all your time I can see it will be tricky getting a job. However if you have time its certainly worth considering.

    What’s the long term prospect for the self employed role? Its worth considering this closely as it closes up good opportunities for mortgage deals etc.
    Good luck
    • mocoates
    • By mocoates 14th Sep 18, 9:37 AM
    • 5 Posts
    • 1 Thanks
    mocoates
    I know I said business isn't great at the moment but it's not dead, far from it. In fact I can manipulate it to make more money, which takes work and effort but it can be done. I'm not a trades person, I actually run a business from a premises with staff etc. The hot weather combined with rising material costs due to the current UK.European economical situation has caused a big dip for me.

    I just one of those payments that comes around every month and smashes me in the face like a hammer at the wrong time.

    But thanks for the mortgage advice, my LTV is very low so there is definitely room for movement and they where quite happy to change my mortgage recently to a lower rate for me, so that really looks like it could be an option.

    Yes, we thought at the time it was a good deal to get out of our situation but I didn't really as much attention to the paperwork as I should have. However, I partly think that was lead by the person who got the loan sorted for us (my mortgage adviser at the time) and was glossed over.

    Onwards, thanks for the help
    • obay
    • By obay 14th Sep 18, 10:09 AM
    • 479 Posts
    • 403 Thanks
    obay
    What is your LTV rate? and what do you pay on the current mortgage?
    What is the interest rate of the mortgage also?
    1/12/16 - 152,599.00
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    Two Credit agreements to pay off - 13653! (inc interest).
    Sofa (DFS) (0%)923/923 - Paid off 7th November - 2017
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    Barclays Car (5.99%)0/8,832.37
    • mocoates
    • By mocoates 14th Sep 18, 10:44 AM
    • 5 Posts
    • 1 Thanks
    mocoates
    LTV is about 55% mortgage rate is currently 2.2% fixed for 2 years repayment is 405 pcm (interest only)
    • takman
    • By takman 14th Sep 18, 10:47 AM
    • 3,649 Posts
    • 3,276 Thanks
    takman
    LTV is about 55% mortgage rate is currently 2.2% fixed for 2 years repayment is 405 pcm (interest only)
    Originally posted by mocoates
    How are you planning to pay off the capital at the end of the term when a small 300 monthly payment causes you so many problems?
    • mocoates
    • By mocoates 14th Sep 18, 11:46 AM
    • 5 Posts
    • 1 Thanks
    mocoates
    Thank you for your concern, that's covered. I don't need to go in to details
    • Lioness Twinkletoes
    • By Lioness Twinkletoes 15th Sep 18, 10:25 AM
    • 1,343 Posts
    • 4,769 Thanks
    Lioness Twinkletoes
    A floundering business, a large secured loan that you're struggling to pay and an interest only mortgage....I see trouble ahead.
    • Edi81
    • By Edi81 15th Sep 18, 11:05 AM
    • 529 Posts
    • 484 Thanks
    Edi81
    If you aren’t going to go into details then the help that people can give you here is very limited.
    It’s going to be highly unlikely that your main mortgage lender (BoI) will lend you more on an interest only mortgage.
    You need to pop over to the debt free wannabe board a post a SOA to see where you could save on other things.
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