Secured Loan Help Please?
I took a secured loan out 1 year ago for the sum of £7,500.
Apr variable 14.9% over 35 years
Last week i called them for a early settlement figure and they sent me a letter.
Balance outstanding £10,059
Add interest to settlement date of 10/05/07 : £125
Add early settlement fee : £96
Add Fee for discharge of security : £200
I can undersand the the last three figures, but why has the outstanding balance gone up by £2559 in one year when i have been paying £101 a month.
I have made regular payments and never missed one.
Please help i will soon be paying it off and i need to know if this is right or not.
Answers:
Under certain types of loans, the balance could increase if you were delinquent in paying interest, or there was some other default, and this is added to the outstanding principal . Or maybe if it was some kind of shady deal where the loan amount was 10,059, but they took so many fees out upon origination of the loan, that you only received 7,500. That sounds very shady, and doesn't seem too likely.
So maybe there is just a bank error. Banks commit errors ALL the time. I suggest you just call them and get it straightened out.
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