Loan agreement & anyone good with maths to work out an APR

[Spinewars23]

Hi,

I’ve been really stupid, before I’ve had chance to back out of a very high interest loan after having second thoughts, it got paid out (after making the application and then getting the impression it wouldn’t get approved until Monday and I would have received some approval call to then be able to withdraw; it’s ended up in my account.

I fully intend to give it back with interest next Monday the 31st July as whilst I’m grateful a lender could help I don’t think I want to handle it for 18 months in the long-term. I have normally in the past gone to a short term (ex payday) 6 month loan lender but it has been a couple of years and this time unwittingly somehow ended up selecting a broker who lead me to what now appears a lender who I’m not totally use to. Reviews on the company show people have been able to pay back sooner so that’s something.

One of those bad credit lenders at 770% interest, I have borrowed £250.00 and am due to repay roughly £51 back per month but if I could dig myself out of a hole now it’s for the best knowing me, could anyone please help work out the APR for 9 days? Thank you.

You're borrowing £250, at an Annual Percentage Rate (APR) of 770%, over 18 months, paying back £51 a month? That doesn't add up... An APR of 770% would mean paying back nearly £2k over the first year, that's a much larger monthly payment.

You should get a 14 day cooling off period - that might be complicated by having used a broker - but you should be able to pay back with no penalty other than interest accrued in the first 14 days.

This website suggests about £50 to settle immediately: www.financecalcs.co.uk/calculators/settlement

Thank you so much for the pointers, I’m getting confused but that definitely displays as that figure, just been looking over agreement, it’s £925.02 to pay back, they do acknowledge the 14-day cooling off period.

Agreement shows monthly payments would be £51.39; total repayable £925.02 but then another figure appears as £975.02 as total of credit so I’m thinking there is a £50 admin or fee of some sort. This will definitely teach me a lesson.

Thank you again for answering.

This is an astonishingly high rate, and actually more than payday lenders are permitted to charge. Some firms get around the FCA's High Cost Short Term Lending cap by extending the loan over 18 months (the definition of HCST loans is 12 months or less), and basically charge you what they like.

You should have received full details of the loan before it landed in your account - including cancellation rights.

Nevertheless, as mentioned, you have the right to cancel within 14 days without penalty and without giving a reason.

I know, awful lesson learnt 😭 it’s because 18 months in, they are not to be treated like payday loans lenders, at 18 months it is a personal loan?

no proof of payslip or ID, just bizarre. Bring back payday lenders as I thought they had to do checks.

Paid back today. 7/8 days later interest cost £1.23 per day.

My £250 loan cost £260 within the cooling off period. You do have to be tied to 18 months.

You do not have to be tied to 18 months apologies

It's daily £1.22 interest.

Can you go to a standard bank instead? Well done for paying it off but seriously please try not to use these people ever again