Paragon Finance

Discussion in 'Motorhome Chat' started by pappajohn, Jan 2, 2008.

  1. pappajohn

    pappajohn Funster Life Member

    Joined:
    Aug 26, 2007
    Messages:
    29,443
    Likes Received:
    16,872
    Location:
    YO11 2BD
    hi,
    when we bought our kontiki in june last year we took finance with paragon finance as a temp measure til my flat was sold.
    now the flat is sold i rang paragon for a settlement figure:-

    initial loan £28,500

    interest over 10 yrs £17500

    total repayment £46,000

    fair enough..... 10yr loan!!!!!!!!!!!

    settlement figure after 6months £40,600 :Angry:

    £12,100 interest after 6 months.

    i make that around 80% apr.

    going to CAB tommorow but i dont know what the hell to do, cant afford to keep the loan for the full term and certainly cant afford to end it.:cry:

    DONT USE PARAGON FOR YOUR NEXT MOTORHOME FINANCE
     
  2. 2escapees

    2escapees Deleted User

    This from there website:

    Can I repay the loan early?
    All loans from Paragon can be settled at any point during the term of the loan. However, you should not use long term loans as bridging loans or for short term needs. You will not (unless the loan has only a few months to run) be required to pay all of the interest due over the remaining term of the agreement.

    If your loan is for more than £25,000 and you wish to redeem within the first 5 years, then an additional 6 months interest will be added to the balance at the time of redemption.

    If your loan is for more than £25,000 and you wish to redeem between the 5th and 10th anniversary of the loan , then an additional 3 months interest will be added to the balance at the time of redemption. After 10 years there is no interest penalty for settling early.

    If your loan is for up to £25,000 then your redemption figure will be calculated in accordance with regulations made under the Consumer Credit Act 1974 and the Consumer Credit (Early Settlement) Regulations 2004. Remember that the rule calculates a rebate on the total charge you would have paid over the full lifetime of the loan.

    Obviously the CAB need to explain advise how to get them to implement what they say above. But at the end of the day money lenders are sharks!

    :Eeek:
     
    Last edited by a moderator: Jan 2, 2008
  3. pappajohn

    pappajohn Funster Life Member

    Joined:
    Aug 26, 2007
    Messages:
    29,443
    Likes Received:
    16,872
    Location:
    YO11 2BD
    Hi guys, i already found that and printed it off to take to CAB.:thumb:
    i dont mind paying the 6 months interest but nearly all of it.............there having a laugh.
     
  4. pappajohn

    pappajohn Funster Life Member

    Joined:
    Aug 26, 2007
    Messages:
    29,443
    Likes Received:
    16,872
    Location:
    YO11 2BD
    my wife has just pointed out the mistake they have made.(hopefully)
    the top hi-lighted pragragh is the one that applies but the bottom one is the one they have used to calculate the rebate. God, please let me be right.

    your last comment is an insult to sharks. :Smile:
     
  5. pappajohn

    pappajohn Funster Life Member

    Joined:
    Aug 26, 2007
    Messages:
    29,443
    Likes Received:
    16,872
    Location:
    YO11 2BD
    went to the CAB today and the good news is we may have been mis-sold finance on a technicality in law.:Angry:
    solicitors next stop.
     
  6. dylan

    dylan Read Only Funster

    Joined:
    Aug 31, 2007
    Messages:
    4,162
    Likes Received:
    569
    Location:
    sw wales
    Fingers and toes crossed for you:pray:
     
  7. Enodreven

    Enodreven xMember

    Joined:
    Nov 28, 2007
    Messages:
    154
    Likes Received:
    1
    I Hope it works out for you,

    But be very, very, careful unless you can get a no win no fee solicitor, as otherwise it could cost you a lot of money if you lose ?

    As you have the money to repay the loan fully, Have you compared the interest you could get if you deposit the amount in a bond rather than pay the redemption fee, only i had a similar situation with Nationwide on a fixed interest only mortgage which we took out 2 years ago.

    They wanted something like £2500 to settle it 2 years early so we put the same amount into a 2/3 year bond with SAGA and are actually getting £28 per month more than we are paying Nationwide so its worth looking around.

    I really hope it works out for you,

     
  8. pappajohn

    pappajohn Funster Life Member

    Joined:
    Aug 26, 2007
    Messages:
    29,443
    Likes Received:
    16,872
    Location:
    YO11 2BD
    Hi Brian,

    while i now have the funds to repay the loan i cant cover the robin hood factor as well. i cant afford to invest the cash i have as i would still have to make the normal payments as well. i expected something around the initial loan amount minus payments already made plus some interest as a penalty but they say the interest was calculated from day one and divided by the loan period accordingly.
    it also transpires it is a HP loan, not a personal loan as we were told(my fault for not reading properly:Doh:) but we were not given the statutory breakdown for early repayment at 1/4 - 1/2 - and 3/4 term as required by law. this is what the CAB picked up on.
    if it must run full term then the £30k i do have will stay in the bank and earn some interest while being used for payments for the next six years til it runs out then take a private loan for the remainder.
    the other problem is we cant sell it for 9 1/2 years without paying the full balance.:cry:

    at least robin hood had the decency to wear a mask.

    i have been well and truly bitten but never again. if i aint got the cash i wont buy the goods.
    wonderful start to 2008:Angry:
     
  9. Johns_Cross_Motorhomes

    Johns_Cross_Motorhomes Trader - Motorhome & Accessory Sales

    Joined:
    Jan 5, 2008
    Messages:
    9,246
    Likes Received:
    5,197
    Location:
    East Sussex 01-580-881288
    That reads to me that you pay the balance of the original loan (capital) plus a penalty interest of 6 months ie one twentieth of the total interest charge.

    If it was under £25000, then the rule of 74 applies, which I can tell you when I get back home

    Peter
     
  10. pappajohn

    pappajohn Funster Life Member

    Joined:
    Aug 26, 2007
    Messages:
    29,443
    Likes Received:
    16,872
    Location:
    YO11 2BD
    hi peter,
    that's exactly as both i and the girl at the CAB read it but when she showed it to their legal man it turned out to be an HP agreement not a personal loan as i thought which come under differant rules.
    i'm still considering weather we were mis-sold on the grounds of not being given 3 illustrations of early settlement at 1/4, 1/2, and 3/4 term.
    it does state on their website that ALL our loans can be repaid as you interpret it but as brian said we could be in deep s**t if we lose any court case.
    we're considering cutting our losses and taking a sensible loan for the extra £10k needed which will price the £28.500 m/home at around £55k in real terms, but the current loan will cost over £47k if it goes full term. at least we wont be stuck with it for the next 10 yrs and will be able to trade-in at a future date.
    as i posted earlier, we have been well bitten and i will never buy on a dealers finance scheme again.

    john.
     
  11. Johns_Cross_Motorhomes

    Johns_Cross_Motorhomes Trader - Motorhome & Accessory Sales

    Joined:
    Jan 5, 2008
    Messages:
    9,246
    Likes Received:
    5,197
    Location:
    East Sussex 01-580-881288
    paragon

    Hi John,

    There is more to this than meets the eye and there are more ways of skinning a cat than one!

    I have owned for many years a registered finance company (running it down now and not taking on any more business) so I am bit in the know.

    Please call me on 07831-301170, mobile I am afraid as I am on my boat and won't be back home until Tuesday, and my internet speed at the marina is dismal!

    Regards

    Peter
     
  12. Rapide561

    Rapide561 Read Only Funster

    Joined:
    Aug 5, 2007
    Messages:
    471
    Likes Received:
    164
    Location:
    Leeds and Lake Garda
    Mis sold

    Hi

    Proving that the product was mis sold is not the easiest thing to do, but it possible.

    Can I just say that, if you leave the £25,000 in a decent bank account, for instance paying 5% nett, your £28500 will be worth £46423.50 assuming interest rates remained constant.

    If you look at www.thisismoney.co.uk and www.moneysavingexpert.com there are sample letters on there.

    Russell x
     
  13. pappajohn

    pappajohn Funster Life Member

    Joined:
    Aug 26, 2007
    Messages:
    29,443
    Likes Received:
    16,872
    Location:
    YO11 2BD
    thanks for the advice russell.
    if you look again at post #8 you will see the problem.
    unless you know of an account that will pay £388 pm interest.:Rofl1:

    john.
     
  14. pappajohn

    pappajohn Funster Life Member

    Joined:
    Aug 26, 2007
    Messages:
    29,443
    Likes Received:
    16,872
    Location:
    YO11 2BD
    cheers peter,
    i,ll call tomorrow night.
    any advice will help.
    john.
     
  15. nannybarbie

    nannybarbie Deleted User

    We got caught the same way with our first van. We borrowed £26,000 and after making payments for 4 years we had to pay £28,000 to clear it off. It wasn't Paragon, I think it was Black Horse so it seems to be a very common problem.
     
  16. cabby

    cabby Deleted User

    as a matter of interest which dealer did you buy from and was it them that advised you on the finance.

    cabby
     
  17. C.L.S

    C.L.S Trader - Service & Repairs

    Joined:
    Jul 22, 2007
    Messages:
    410
    Likes Received:
    49
    I was told recently by 2 different dealers that this ( legalised theft ) practise is due to change in April of this year when new rules governing loans over £25000 come into force. And apparently they will cover loans / agreements taken out before this date. Might be worth waiting till after April to see if correct :Wink:
     
  18. camcondor

    camcondor Read Only Funster

    Joined:
    Jul 27, 2007
    Messages:
    1,044
    Likes Received:
    477
    Location:
    East Midlands
    Pappajohn, from experience I can say that you CAN indeed trade your motorhome in before the finance agreement is up - dealers are always able to settle with the finance companies in order to sell you something else. We did this with our last motorhome - traded in for the Adria, even though we had only had the motorhome (a Ravenna) for a year at that stage. The sales person when we bought our first m/h on a 10 year finance plan told us that people tended to trade in on average 18 months- 3 years after taking the initial 10 year loan. It does tend to tie one to dealer trade ins as they obviously get special arrangements with the finance companies but you certainly can change your van without as much of a punitive loss as settling direct with the company, this way, years and years before the 10 year arrangement was up. We lost very little on the Ravenna this way as the dealer wanted to move a more expensive MH.:RollEyes:

    It is the most awful way to have to buy a MH mind you, and I would have done it any other way if I'd had the cash that most MHome owners seem to have....:Sad:

    Hope you can get a better settlement arrangement by talking to a dealer in the know / someone who is clued up with these financial arrangements.

    Laurie:thumb:
     
  19. Johns_Cross_Motorhomes

    Johns_Cross_Motorhomes Trader - Motorhome & Accessory Sales

    Joined:
    Jan 5, 2008
    Messages:
    9,246
    Likes Received:
    5,197
    Location:
    East Sussex 01-580-881288
    Hi Laurie,

    That only works if you buy another MH and take out a new agreement with the original finance company generally as they are not losing any business by the change and keeping the customer.

    On all early settlements, the finance company is entitled to charge a settlement fee as basically they have contracted out that amount of money for an agreed period of time and have calculated the total interest receivable into their profits and paid commission accordingly.

    Depending on the agreement if its under £25000-00 loan, then it comes under the rule of 74 which is a scale fee depending on how long the loan has run and then discounts the original charges and allows a rebate for early settlement.

    Over £25000-00 I am not sure at this stage, but I see absolutely no reason for the astronomic figure that he has been quoted and I am fairly sure that the FSA would have something to say about it as its basically usury. It it was me, I would apply the rule of 74.

    As I said before I don't know the rule of 74 off the top of my head but I have it at home and will check the figures on Tuesday.

    It is invariably cheaper to arrange a bank loan than use a finance company, but then you dont have the 'fall back' of going to your bank should you need further finance for say home improvements.

    The cheapest and best way to borrow money is through your mortage, its at a lower rate than a finance company, personal loan or overdraft at the bank and it doesnt affect your credit rating by extra searches on you. It wont get you a better deal though by shouting I am paying CASH as the dealer would rather sell you finance and earn commission!!!

    Regards
     
  20. pappajohn

    pappajohn Funster Life Member

    Joined:
    Aug 26, 2007
    Messages:
    29,443
    Likes Received:
    16,872
    Location:
    YO11 2BD
    blackhorse (and carcraft) is another i have had a problem with but entirely my fault for not reading the agreement properly. i asked for a 3year loan and arthur daily signed me up for 5years!.
    john
     

Share This Page