My uncle died a few days ago. His legal papers have been returned to my Dad, his brother. Amongst these papers, it transpired that he had taken out a loan for £200, which, with interest, needed £320 to pay off.
If my maths is correct, that’s an interest rate of 60% (if I’m wrong, I apologise, my percentage calculations were never that great). Is this an illegal rate? What can my family do to report this company (preferably anonymously, if possible) if it is illegal?
What was the term, or length, of this financial instrument?
30-day “Paycheque Loan”?
1-year unsecured note?
2-year note?
Were there “fees” that might not count as interest?
I don’t know, I’ll have to ask my mum. I’m at university right now, but all I know is that she said that it was £120 interest when I spoke to her last. What would be the difference be? Is an interest rate of 60% legal on some loans?
I’d suggest a quick word with your (or you mother’s) local Citizens Advice Bureau. They have been campaigning about ridiculously high loan interest rates for ages and should be able to say pretty quickly whether the terms of your uncle’s loan were legitimate or not.
You haven’t included a time betwen the loan and the payoff call.
Even a 5% rate on 200 pounds could result in a 320 pound payoff, if payments haven’t been made.