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Hi,

Im new here and wondered if i can get some help.

 

My wife and I took out a remortgage in Oct 2004 for £22k. Payments at £333.06PM over 180 months at a eye watering 17.9%. We were not aware that the finance company were using the Rule 78 system until a few years ago. Since last year we have gone into arrears as we could only afford to pay £200pm.

 

Last statement in February 2013: Balance was £28,699.76 and arrears balance £2,388.02

 

The original agreement has no mention of Rule 78 so I need to know if their practise is illegal and if we have a claim of any sort.

 

Help!!!

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How do you now the rule of 78 is being used?

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Because when I questioned how interest was being applied they sent me a table of rebate fractions by rule 78 explaining that was the method being used

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Well rule of 78 was a method used when loans were settled early and tended to penalise the borrower on settlement.

 

For a loan which is ongoing you should just be charged interest on the amount outstanding from month to month an of course on any arrears that have accrued.

 

If you wanted to settle the loan and they used rule of 78 to calculate the settlement figure you could challenge it as being an unfair term.

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1. Single Premium PPI Q&A Read Here

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Read Here

3. Reclaim Loan & Credit Card Charges Read Here

4. The CAG Interest Tutorial

Read Here

5. Feel Bullied by Creditors or Debt Collectors?

Read Here

6. Staying Calm About Debt

Read Here

7. Thinking of a Full & Final Settlement?

Read Here

 

How To Upload Documents To Cag

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I DON'T GIVE ADVICE BY PM BUT IF YOU SEND ME A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER HELP THERE

 

 

 

Private message facilities are offered for users to communicate issues that are perhaps inappropriate for posting on the main forum. Site rules explain this in more detail.

 

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So for settlement, would they have to apply rule 78 till the year 2010 and anything after that would be based on current regulations? O

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If you wanted to settle now then I think you would have a strong case to argue that the lender can only charge two months interest as an early settlement charge.

 

Some people get confused with how interest is actually charged over the lifetime of a loan. In the early months of the loan there is a large amount of capital outstanding and so more interest is apparent in the early years of a loan. As the loan progresses more of the capital is paid off so the interest amount reduces.

 

Interest isn't charged in equal amounts per month.

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1. Single Premium PPI Q&A Read Here

2. Reclaim mis-sold PPI

Read Here

3. Reclaim Loan & Credit Card Charges Read Here

4. The CAG Interest Tutorial

Read Here

5. Feel Bullied by Creditors or Debt Collectors?

Read Here

6. Staying Calm About Debt

Read Here

7. Thinking of a Full & Final Settlement?

Read Here

 

How To Upload Documents To Cag

Instructions

 

I DON'T GIVE ADVICE BY PM BUT IF YOU SEND ME A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER HELP THERE

 

 

 

Private message facilities are offered for users to communicate issues that are perhaps inappropriate for posting on the main forum. Site rules explain this in more detail.

 

If you receive a private message which you consider abusive, derogatory or otherwise inappropriate, whether it be about yourself or other members, please report it using the "report" icon

 

If you are approached (or have been approached) by private message with an offer of help "Off Forum" or with a view to asking you to visit another website, please inform the site team via the report icon, especially if this results in a request for a fee. Remember, this is for your own protection

my views are my own and are given in good faith to try and help people. Please seek professional advice on your case if necessary

 

PLEASE HELP US TO KEEP THIS SITE RUNNING

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