Loan....surely I've overpaid?

[Stressypantsagain]

I took out a 25 year loan, I have paid 15 years so far.
Original loan was £50k plus £12k ppi on top which was refunded as I didn't agree to it.
In 15 years I've paid over £70k and they still say I owe £50k
Surely this can't be right?!!
Where would be the best place to go for advice?

Sadly, that does sounds right for a 62K loan over 25 years with a flat interest rate plus payment holidays.

Your mistake was not paying the 12K off the loan when it was refunded to you - instead you are now paying 25 years worth of interest on it.

But a loan over 25 years is always going to see you paying off way more proportionally than you borrowed.

On the annual statements, I can’t vouch for the info, but there’s quite a lot of references on line to the Consumer Credit Act (which requires the statement) not applying to loans greater than £25K taken out before April 2008 - which will include yours if indeed it’s 15 years old.

www.lendingexpert.co.uk/guides/what-is-the-consumer-credit-act/

You can still make a statement request to Elderbridge. Whether you go to CAB or elsewhere, you do need to get as much info as you can.

I’d be interested in that Covid furlough “holiday”. A lot of people don’t understand that sort of thing wasn’t just a kind gesture break with no financial impact.

Sounds like you were on an interest only plan rather than a 'proper' repayment plan. Have you checked at all what you have been repaying over the last 15 years? Awful to have found out now - but could be worse as you could have gone all 25 years!

To me, it sounds like you were hideously missold this loan - first the huge PPI but also the repayments that should have been bringing your total down so that you would have repaid a big chunk by now.

Look seriously into complaining about this - financial ombudsman maybe? There is such a precedent in recent years for getting back missold loans etc so fingers crossed.

NRTFT, but have you got the original loan agreement? Was it fixed interest rate or variable?

Some fixed rate loans are very expensive to repay early as they include ALL the interest that was due to be paid over the FULL loan period with only a small rebate/reduction. Only the loan agreement itself will say how the early redemption works as regards the interest between the redemption date and the original full repayment date.

I don't have experience of Barclays loans, but I do have experience with Nat West who were diabolical with very small rebates/discounts for early repayments, meaning that even if you fully repaid half way through the term, you'd still have to pay around 90% of the interest as if it were left to run the full term. The worst were what they used to call "business development loans" made worse by unscrupulous bank staff who'd recommend paying off a BDL loan with a bigger BDL loan, where you'd end up with an enormous "debt" because the bigger loan also included most of the interest charged on the earlier loan despite early repayment. I know some of today's car lease schemes work the same way.

@RebeccaCloud9

Sounds like you were on an interest only plan rather than a 'proper' repayment plan. Have you checked at all what you have been repaying over the last 15 years? Awful to have found out now - but could be worse as you could have gone all 25 years!

To me, it sounds like you were hideously missold this loan - first the huge PPI but also the repayments that should have been bringing your total down so that you would have repaid a big chunk by now.

Look seriously into complaining about this - financial ombudsman maybe? There is such a precedent in recent years for getting back missold loans etc so fingers crossed.

That doesn’t make sense on the info given. OP borrowed £50K + £x PPI (possibly not £12K). She now owes £41K. So it’s not interest only.

Nothing to suggest that the loan was mis-sold, only the PPI.

OP, I’d be wary of assuming that the £12K is the magic explanation here. You need to get paperwork, and CAB can help you with the legal way in which to make that (free) request - and to whom, some things go to the original lender.

There is a lot of info online about Elderbridge and unfair interest rates. So it could be an increased interest rate that has contributed to this. None of us can say.

Please get CAB to help you with paperwork.

@user1497207191 that’s an excellent point about including all future interest payments.
That was mostly stopped by the Consumer Credit (Early Settlement) Regulation 2004. Which pre-dates this loan. But as I mentioned above, >£25K pre April 2008 is not covered by Consumer Credit Act and so I suppose - but don’t know - might not be covered by the early settlement regulation.

OP, CAB will definitely have experience of this. Don’t wait though… there are time limits on complaints to the FOS.

Ahhh I saw the bit that said her 12k was refunded, missed that she spent it elsewhere. Also, in the op she says she borrowed 50, has paid back 70 and still owes 50.

@RebeccaCloud9 yes, there’s a mix of info! Hopefully the replies will give the OP some pointers for clarifying it all 😀

Sorry im at work so just a quick update.
I found the original loan letter from barclays
50k loan ,ppi 12k so total 62k
Repayment amounts show as loan and ppi Repayment which totalled £429, the original interest rate was 6.9%
The 12k was in cheque form from barclays, I still have 7k of it in savings.
I claimed back the ppi myself, no third parties .
I had a letter from barclays to say the loan was being taken over by elderbridge.
Since then I have had no statements from elderbridge,I had a letter last week saying the interest was changing to 6.2% in May which got me thinking about how much more I had to pay.

If you didn't pay the ppi cheque towards the loan then its £62K you are paying off not £50k

Bloody hell, you agreed to a £12K PPI premium?!!
It doesn’t make sense that your repayment of that was £12K though.
How did your repayment letter from Barclays break that down?

When did you take out the loan, and when did you get the PPI repayment?

According to this you do still owe about £50k if you've paid off £70k

When you got your PPI refund, there should have been an element of interest added. If not, there's an opportunity to claim the interest as well. Check out MSE for details.

Don't know if anyone remembers this thread but thought someone may be interested.
I was told I owed 41k
After a long winded investigation by the ombudsman, 28k was wiped off the loan which left 13k balance and they accepted 10k so matter is now closed.
It's always worth questioning!

I agree thanks 😊

Congratulations and well done on persevering @BigYellowBear

Thanks, I must admit the ombudsman were very good, kept me in touch the whole way through.

Well done op - glad you got it sorted