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interestrateripoff

First Plus Loan, £35K 10 Years Ago And Now Still Owe £40K

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http://www.dailymail.co.uk/money/cardsloans/article-2431010/FirstPlus-customer-left-paying-sky-high-rates-despite-record-low-base-rate.html

'I have been paying off my £35,000 loan for 10 years but I still owe £40,000': Customer of failed FirstPlus left paying sky-high interest rates despite record-low base rate

Mark Wilson wasn’t happy when the interest on his loan climbed above 12 per cent - but he grudgingly admitted the terms of his deal meant there was little he could do.

But when base rate started to drop, he expected his repayments to fall, too, again because his contract suggested they would. It never happened.

..

It allowed the bank to hike interest rates - in his case from 9.4 per cent to 12.1 per cent when the Bank of England base rate rose from 3.75 per cent to 5.75 per cent between 2003 and 2007.

But when the base rate fell to its historic low of 0.5 per cent in 2009, the interest on his loan remained where it was.

Mr Wilson, who is self-employed, originally borrowed £35,000. But despite nearly a decade of paying it off, he now owes more than £40,000.

Clearly Barclays have used the clause to benefit themselves, it would be interesting to see what a judge would rule. However I have no idea how you can pay off a loan for 10 years and owe more than when you originally started. This isn't explained in the article could you use this first plus loan like an overdraft and keep taking out the money you've paid back?

Their does appear more to this story than what's written.

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If it's not a PPI policy on top, he might be quoting the total amount payable. He could have 8/9/10 years of £450/month remaining at current repayments.

I hope he enjoys his conservatory and the money spent acculumating the debt he is now paying off.

Edited by The B.L.T.

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http://www.dailymail.co.uk/money/cardsloans/article-2431010/FirstPlus-customer-left-paying-sky-high-rates-despite-record-low-base-rate.html

Clearly Barclays have used the clause to benefit themselves, it would be interesting to see what a judge would rule. However I have no idea how you can pay off a loan for 10 years and owe more than when you originally started. This isn't explained in the article could you use this first plus loan like an overdraft and keep taking out the money you've paid back?

Their does appear more to this story than what's written.

Loan of £35,000 + Term repayment protection insurance of £15,000 = total loan of £50,000 + interest at 12%.

When mrs khards left uni she took out a loan from halifax to pay off uni overdraft and cards , after a couple of years I got here to check up on how much was left on the loan and the balance was more than the initial borrowing amount.

Needless ot say we reclaimed the PPI back and paid back the loan.

Most people do not check the loan paperwork as they are usually thrilled that they were accepted for the loan and fearful about losing the loan offer. They just sign on the dotted line and hope for the best trusting the banks and regulators will not rip them off.

Edited by Gone to Ireland.

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At least he, the father of two, got the conservatory he wanted from the loan he took in 2003, + policies that have kept his house inflated in price.

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First plus are usually secured loans too, so this is essentially a second mortgage. They were big on PPI also. Fairly normal rates and behaviour for a 2nd mortgage company I would have thought.

When it was taken out there was no regulation on secured loans,bit like BTL today. Now regulated but I don't know if any of the regulations are retrospective or not. Unlikely.

Not worth it for a conservatory, that's for sure...

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