Crippling Nemo Loan desperate for help
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.
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.
0
Comments
-
What's the APR on the loan?
Do you own your home?0 -
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.0 -
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.
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?0 -
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."0
-
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.0 -
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.0 -
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?
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.No free lunch, and no free laptop
0 -
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!0 -
OP, any answers to the questions folk have asked?0
-
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 thought0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards