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Interest reversal on loan

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(@marie50)
Active Member
Joined: 9 months ago
Posts: 4
Topic starter  

Hi, 

When I signed my DAS I was told all interest would be frozen, however for my loans I knew the interest had been added when I took out the loan. 

I expected to pay the full amount of interest during the term of the DAS, but I've received a letter from one loan company showing an interest reversal of £4k.

Obviously I'm delighted, but now wondering if the other loan company will follow suit.

Is this something that depends on each company's policy and if so, I'll wait to see if I receive a letter, or should I be chasing it up?

Thanks 


   
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Kevin Mapstone
(@kevin-mapstone)
Member Admin
Joined: 15 years ago
Posts: 4253
 

Hi Marie50.  The answer apparently depends on the credit agreement that you signed in the first place.  No further interest is allowed to be added once a DAS has been approved and as most loan agreements are based on interest accruing daily, it is very straightforward to work out.  However some lenders claim that the agreements they have allow them to add all interest on day one, meaning it has already been added when you enter your DAS and there is no further interest payable that could be stopped.  

It doesn't seem right to me and I wonder whether it is actually compatible with the Consumer Credit Act, however I am not a lawyer and the DAS Administrator seems happy enough to accept this kind of argument from those lenders.  So I guess the answer is to check your loan agreement, see if it mentions daily accrual of interest anywhere and if it does then contact your money adviser about it so that you can hopefully get the same result as with the first loan.

Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.


   
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(@marie50)
Active Member
Joined: 9 months ago
Posts: 4
Topic starter  

Thanks Kevin


   
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