Flynrider
Phoenix,#2Consumer Comment
Tue, December 07, 2010
"They scammed us by requiring that we borrow twice as much as we needed to begin with"
That's not a scam. If their minimum loan is $10K and you only need $5K, then you move on to a financial institution that will better serve your needs. If their minimum loan was $50K, would you have signed on for that? You seem to suggest that you had no choice in the matter. As adults, you had the choice of declining the offer if the principal amount and the interest rate doesn't make financial sense.
"However, again, we signed for the loan and agreed to everything when we signed on the dotted line. Really, how many people sit and calculate how much goes on the principle and interest charges when they desperately need a loan for something major?"
People who do not want to spend ridiculous amounts of money on interest generally evaluate the cost of the loan before signing on the dotted line. Otherwise, they end up like you. Calculating the cost of the loan 4 years into it and being angry. It sounds like you signed on for a pretty high interest rate and borrowed twice what you needed (thereby paying twice as much interest). What part of this deal sounded good to you in 2005?
Jim
Orlando,#3Consumer Comment
Tue, December 07, 2010
First, if their minimum was 10k and you didn't like it, then COMMON SENSE dictates you find a loan company who doesn't have a 10k minimum. Nobody forced you to do business with them.
In the start of a loan most of the payment goes to interest. If you are a SUBPRIME credit risk, then your interest is higher.
Next time, know what you're talking about when you throw around terms like "scam".
MovingForward
Wellington,#4Consumer Comment
Tue, December 07, 2010
HFC preys on people that don't understand finance. I can understand that you needed $5000 for your well water system. However, once they "made you" borrow the $10,000 you could have made a $5000 payment right away with the proceeds since you did not need that other $5000. You would be much further ahead now and every subsequent payment would have applied more to the outstanding principal balance. There is no restriction on how much you can pay every month. The amount that is due showing on the statement is the minimum payment due. Every dollar paid over the minimum amount is applied to the principal.
Didn't they send you statements each month telling you how much was being applied to the interest and how much principal was being paid with each payment?
I hope this was an unsecured loan and not tied to your home as a second mortgage. Once you pay off the loan, make sure that there is no residual interest that accrues while they are processing the payment. You may also want to make sure they actually close the account so no further interest can be added.
If this loan was tied to your house, then make sure you get a 'mortgage satisfaction' from HFC and record it in the public records when you pay the loan off. Otherwise there will be an outstaning lien on your house that would have to be paid again if you ever sold your home or refinanced your primary home loan (and it would end up costing you a lot more than $10k).
Do you know which type of loan it was? Unsecured or secured?