help very high interest rates on loan

[binkhus]

hi im after a bit of advise. i got into financial trouble about 3 years ago and the only people who would lend me money to cover christmas was a company called provident.

my first loan was for £200 and i paid back £310. after neruing and renuing my loans i am now paying back £50 per week out of my benefits!!!i borrowed £800 and paying back £1512. then they let me have another £800 payable back £1512 and my husband has a £600 loan which we have to pay back £990.

now before i got into this web site and started to question authority i just paid this every week without question but these interest rates look VERY high to me and i was just wondering if they were legal? its almost loan sharkish that they charge this much. any advise would be great

thanx

[alexifa]

The interest rate may be high (how long is th term of each loan) but this in itself is not illegal.

What were the reasons for the original financial difficulties, were you charged and/or defaulted on credit you had outstanding back then?

[binkhus]

the longest term is for 105 weeks and the shortest is 55 weeks. i was just very bad with money when i first left home. got into debt with council tax and behind with my mortgage then got a ccj so got black listed.

these sorts of companies just seem to be making lots of money off the backs of people in difficulties. on the 800 loans im paying back nearly 100% intersest.

[alexifa]

The APR looks to be about 75% which is, of course, very high.

However, these companies argue that they need to charge a higher APR because the loans are relatively small amounts. If they were charging 10% APr their cash profit(before paying any wages and costs) would be around £85 and they say they couldn't afford to do that.

 

I don't think you have any kind of claim in regards to the interest rate. With your old mortgage you probably had some charges applied and could claim these back. Was it in the last 6 years?

[binkhus]

no it wasn't, im pretty much sorted now, i spent a long time trying to get my finances in order and with exception to the bank charges this was the only thing that bothered me. thanx for your advise.

[diddled]

I know a couple of ladies who act as agents for Provident. They informed me that Provident readily agree to accept reduced weekly payments in cases of hardship, and do not take legal action as long the agreement is kept.

[sequenci]

are these agreements regulated under the CCA 1974?

have you had a default notice on any of these?

even though the interest rates are high, it might be difficult to argue extortionate credit. It could be worth taking a look at ss137-140 of the CCA for more info.