Welcome Finance any dealings???

[Grapes]

Hi

 

Interest rate 1.7% a month (apparently), payment £261.06

Not sure if that works ....... but will amend my spreadsheet.

[martinpar]

Grapes, I see you're in my neck of the woods. I guess you've dealt with the Norwich branch? Found them a nightmare. Only time I got any sense was when they sent the manager from Cambridge to look after things and he was brilliant. Sorted my insurance cancellation, rejigged the loan and removed any detrimental record on my credit file. Sadly he went back to Cambridge and I haven't had to deal with the office since so don't know if it's gone back to what it was or not.

[Grapes]

Yep Norwich. Ummm not very good really.

We certainly got suckered but working on sorting that out at the mo.

Find that they talk at you rather than too you, so have decided letters are easier!

 

By the way didnt mean that your spreadsheet didnt work in the earlier message just that I cant make my figures work!AS I said I think it was 1.7% as thats on the form but so is 26%APR (Confused ....)

[martinpar]

Grapes, I just plugged your figures into my spreadsheet and it works spot on.

 

For anyone else who wants to use my suggested spreadsheet:

 

If you change B2 to =A2+B$1 (and ctrlD down) then make B1 equal to the difference between the first month's interest and the monthly payment it makes it a bit more versatile.

[martinpar]

Grapes, we cross-posted there. APRs are something that nobody seems to understand. That's why the government chose them as the standard figure all lenders have to quote for comparison (!) but it only works if you compare identical loans. Different lengths of repayment affect the APR for instance.

 

 

I think, crudely, you take the total interest paid and divide it by the number of years, then express it as a percentage of the original amount. No that can't be right because that makes yours come out as 13%.

[martinpar]

Since it relates exactly to the discussion on monthly interest here's a definition of the rule of 78 which I found:

The Rule of 78

 

When you borrow a sum of money from a bank or other lender, you usually arrange to repay the loan with a fixed interest rate by a specific date in a set number of equal installments. The rule of 78 is one way in which lenders calculate how much interest you should have paid at any stage during the repayment period of a fixed rate installment loan.Where does “78” come from? The number derives from the 12 monthly parts of a one-year period. The sum of those parts (12+11+10+9+8+7+6+5+4+3+2+1) is 78. Thus, for a loan with a one-year duration, the lender expects you to pay 12/78ths of the interest in month one, 11/78ths in month two and so on down to 1/78th in month twelve.

The rule of 78 takes into consideration the fact that you pay more interest in the beginning of a loan when you have the use of more of the money and you pay less interest as the debt is reduced. Because each repayment installment is the same size, the part going to pay off the amount borrowed increases over time and the part representing interest decreases.

Should you decide to repay a loan early, the lending institution will use the rule of 78 to determine how much interest you do not have to pay. However, you may be unpleasantly surprised by how much of the capital sum of your loan remains outstanding.

The key point is that the interest you are charged on the sum you have borrowed is NOT spread evenly over the number of payments you have agree to make. Thus in the early period of your loan's life span you have been paying more interest and less capital, reducing the outstanding amount more slowly than you may have assumed.

 

 

Now I think about it, that is what my son was referring to when he said front-loading was illegal. The rule of 78 cannot be used for new fixed interest, fixed period loans any more. I'm guessing that's why it doesn't apply with credit cards, because you couldn't really make it work any other way. Similarly, with mortgages being variable interest it wouldn't work. I think it does mean that new secured loans with Welcome are now much fairer for early redeemers.

 

One final point, not directly related the foregoing, that is why it is good with a repayment mortgage to try and pay extra in the early years, because this will have a dramatic effect later on and can shorten the length of the mortgage by years.

[tbern123]

Since it relates exactly to the discussion on monthly interest here's a definition of the rule of 78 which I found:

The Rule of 78

 

When you borrow a sum of money from a bank or other lender, you usually arrange to repay the loan with a fixed interest rate by a specific date in a set number of equal installments. The rule of 78 is one way in which lenders calculate how much interest you should have paid at any stage during the repayment period of a fixed rate installment loan.Where does “78” come from? The number derives from the 12 monthly parts of a one-year period. The sum of those parts (12+11+10+9+8+7+6+5+4+3+2+1) is 78. Thus, for a loan with a one-year duration, the lender expects you to pay 12/78ths of the interest in month one, 11/78ths in month two and so on down to 1/78th in month twelve.

The rule of 78 takes into consideration the fact that you pay more interest in the beginning of a loan when you have the use of more of the money and you pay less interest as the debt is reduced. Because each repayment installment is the same size, the part going to pay off the amount borrowed increases over time and the part representing interest decreases.

Should you decide to repay a loan early, the lending institution will use the rule of 78 to determine how much interest you do not have to pay. However, you may be unpleasantly surprised by how much of the capital sum of your loan remains outstanding.

The key point is that the interest you are charged on the sum you have borrowed is NOT spread evenly over the number of payments you have agree to make. Thus in the early period of your loan's life span you have been paying more interest and less capital, reducing the outstanding amount more slowly than you may have assumed.

 

 

Now I think about it, that is what my son was referring to when he said front-loading was illegal. The rule of 78 cannot be used for new fixed interest, fixed period loans any more. I'm guessing that's why it doesn't apply with credit cards, because you couldn't really make it work any other way. Similarly, with mortgages being variable interest it wouldn't work. I think it does mean that new secured loans with Welcome are now much fairer for early redeemers.

 

One final point, not directly related the foregoing, that is why it is good with a repayment mortgage to try and pay extra in the early years, because this will have a dramatic effect later on and can shorten the length of the mortgage by years.

 

Sorry, I know this is off topic a little but in relation to mortgages, if your mortgage is a repayment to start with most of your monthly contractual payment will be interest, as you continue through the term of the mortgage the percentage of your payment that is interest decreases and the amount the reduces capital decreases.

 

In relation to old type "traditional" mortgage (interest calculated annually)To balance interest rates increasing and decreaseing mortgage providers have what they call mortgage year end, this is when your payments for the following year are amended to counteract any interest rate movements.

 

In relation to the newer "flexible" mortgage interest is calculated either daily or monthly, dependent upon mortgage provider and type of account.

[martinpar]

tbern, I'm not sure anything is off-topic on this thread anymore.

 

Thanks for filling the gaps in what I said.

[soli2006]

This is all getting very complicated. LOL. Is this legal though? I know its unethical, but is this within the law? They lend you money, the repayments (whilst you know the rates are extortionate) are within your budget, then you get into difficulty & discover that the loan is structured in such a way that you owe far more than was ever borrowed even though you've made repaments. It just seems wrong.

I deal with the Birmingham branch (or did - i gave up a long time ago. Nobody ever wants to talk to you, letters are never answered) & have also had dealings with Dudley, & Newport, South Wales. I'm writing direct to head office now. DLC (the DCA) are now over their 12-days, so counting down the next month now.

Thanks for all the advice & support guys - much appreciated.

[Rich44]

I've had a similar situation with the Norwich branch borrowed £1800 2 years ago, last year got into trouble and now I find that I actually owe £5800 despite paying 12 months at £170 a month without fail which is still more than the original amount borrowed, I dont seem to have made a dent in it surely this cant be legal

 

I had been on long term sick at the time I got the loan I was just about to return to work so i'm thinking all the insurance is probably invalid from that PoV

[martinpar]

Rich,

 

I think you'll probably find it works out correctly. Don't know how long the original loan period was but you'll probably find that first 12 months paid off hardly any of the capital, then by not paying for another 12 months (if I'm understanding you correctly) the interest would be added each month plus at least one charge, no doubt, so there'll be interest on the charges as well. Seems a lot but I don't know what your rate of interest was. That is no longer allowed with unsecured borrowing but existing loans are not affected.

[Rich44]

Original loan was £1800 over 3 years at £170 per month = £6120 so after 12 months of uninterrupted payments and a further 12 months of reduced payments and the occassion where I just couldnt afford to pay them anything I now owe £5800

 

The loan was unsecured

 

I'll SAR them in due course but with everything else its getting time, I had a couple of visits at my old address and they offered to reduce payments if I paid them up to date which I did everytime and once they had had the money the offer to help vanished never to be seen again etc

 

I then moved house and hand delivered a letter to them with the new address and didnt hear anything from them and with everything else going on forgot about them (had a particularly bad year last year) till recently when they knocked on the door and I offered them £20 a month which they have accepted till January.

 

I didnt want the insurance policies they make you have but was told no insurance=no loan so felt I had no choice, I was off long term sick when I signed the papers with the sick note due to run out around that time so I dont think the health insurance would be valid anyway and more to the point they knew I was off sick as they called my boss and he told them lol.

[martinpar]

It really is amazing how the maths works out. I plugged your numbers into my spreadsheet and I reckon the interest is about 9% a month. After a year of payments you still owed 1638 of the capital. If you made net payments of 50 a month for the next 12 months (payment less any monthly arrears charge they might have added), then another 6 months of no payment and a monthly charge of 25 you would owe 6229. I don't know if that equates to your situation in any way but it shows their figures could be correct. It doesn't, of course mean that they have done everything properly and legally. In particular, I should think there's a good chance they were charging each month you were making those arranged lower payments. If they came to your house to collect they have a standard 25 charge which they often don't tell people about.

[martinpar]

BTW, I think I mentioned it before but I was told when I got my first loan that if I didn't want the policies they'd have to requote and it might cost just as much. Illegal but when you're in desperate need of the money and sitting in the office you don't argue, do you?

[soli2006]

Trouble is that until i get a response to my SAR, i haven't got a copy of my original agreement. Just have to sit tight. I'm in the position of owing £5300 (or so) on a loan for £3000 taken over 2 years having made payments of £186 permonth for 13 months. I'm sure the maths will work out, but this simply cannot be legal. And yes, i know what you mean about 'sitting in the office' at Welcome. In my own case, i desperately needed the money & no High street lender would touch me. Welcome was the last-chance-saloon for me (as i'm sure it was with most of us) & it was that or nothing. And nothing wasn't an option. The sell is very pressurised, nothing is explained & frankly I just wanted to sign up, get the money & get out. Probably the worst decision i ever made in hindsight.

[Grapes]

Know how you all feel. With us it was being on the brink of losing the house, the following just about describes it ....

 

The Manager and representative had both offered help, intimating initially that the original loan could be increased, the term lengthened and the monthly payments reduced. When the representative arrived he said that the payments would be have to be increased, we said at that time that we would be unable to support that level of debt. The representative replied that Welcome would be able to help with re-mortgaging and the Welcome loan would be part of this re-mortgage, thus bringing the payments down to an acceptable level, this was to prove totally incorrect! He had a cheque with him and we were desperate

 

My letter said we signed the insurance forms therfore it was not mis-sold, yeah right

[falcon185]

Hi Grapes,

please dont feel your alone on this, lots of us got to that situation, they dangle the carrot knowing you wont refuse which in turn ties you in with them for an even longer period, paying more over the same period too. Lets hope everyone who has had problems such as ours manage to get them resolved.

[martinpar]

The sell is very pressurised, nothing is explained & frankly I just wanted to sign up, get the money & get out. Probably the worst decision i ever made in hindsight.

 

Ain't that the truth. I'm not a naive kind of person but you feel that way in that situation. I did ask some pertinent questions but only got the vaguest of answers and because you always fear they'll maybe look more closely and change their mind you don't push it. I hope I can get my credit rating back up to a level where I will never ever have to deal with people like them again.

[fatdogmendoza]

Ive heard on the grapevine welcome finance are not fsa due to the fact they charge too much interest.My friend still owes them £6000 and she ignored all the letters about court procedings an stuff and eventually they stopped sending them an she hasnt heard a thing for 2 years!

[Rich44]

makes you wonder if their loans are actually enforceable like logbook loans?

[soli2006]

Logbook loans?

[Rich44]

do a search for them on here for them nasty bunch of people

[breadline]

makes you wonder if their loans are actually enforceable

 

From what I've experienced totally not.

But they wont be stopped

 

Their lending of cash with their shopacheck departments were secretly filmed at Christmas time prayng on parents with no cash.

Turning up on their doorstep showing them bundles of notes.

 

It ruffled some feathers but they are still in business the only way they will stop is if people stop using them and with the money problems out there its not going to happen.

 

Cattle's put a lot back into the community Cattles

and thats how they get away with it all:(

 

Cattles is an independent company listed on the UK Stock Exchange providing a wide range of financial services and products. It is a member of ethical investment index FTSE4Good, which is regarded as a global CR performance standard.

 

In addition to being actively involved in Business in the Community CR initiatives the company has been heavily involved in BITC’s employee-volunteering initiative Leeds Cares.

 

Since 1999, under the chairmanship of Sean Mahon, Leeds Cares has brokered more than 100,000 volunteering hours with 350 community partners. Mr Mahon has recently taken over the Chairmanship of BITC’s National Cares movement and was appointed HRH, The Prince of Wales’ Ambassador for Yorkshire at BITC’s National Awards for Excellence 2004

[jcasey2408]

Sorry to hijack the thread but i was just wondering if a copy of my loan agreements came with my SAR or do i have to apply somewhere else for that?

Also does anyone have any letters etc as to how i can stop them calling me a dozen times a day.

They have my bank card number and are ringing for me to authorise a payment but i have told them i will be sending a cheque once my chequebook arrives but they still keep ringing me. Doorstep caller expected anyday now.

[soli2006]

jcasey - try this page

 

http://www.consumeractiongroup.co.uk/forum/debt-bailiffs-advice/46816-capquest-help.html

 

worked for me with a few people