Quicken Loans is a US-based mortgage lender, a subsidiary of Rocket Companies, Inc who are based in Detroit, Michigan.
Why do debt problems exist, and what are the government doing to help?
Unfortunately, debt problems are usually a result of lenders giving loans to the wrong people, or inflating interest rates and fees. With this in mind, it is understandable why debt problems exist and why so many people are suffering with debt. The situation is significantly better than it once was, however, debt is very much still a major problem in society these days. This is why new regulations were put in place, and these did make a difference. The loan business was getting out of control at one point, with lenders giving out loans to the wrong people, and failing to consider their circumstances. Some of the most well known lenders suffered at the hands of these new regulations.
Loan interest and their charges – what the government cap means
The Financial Conduct Authority decided to place a price cap on lenders, with the purpose of providing protect for borrowers who were at risk of being on the receiving end of excessive charges. These price caps included:
- A cost cap of 0.8% per day on the amount of money you have borrowed– this incorporates interest and fees.
- A cap on default fees of £15 – once a default has been charged, interest may still be charged on the payments, but it cannot be more than the standard rate of 0.8% per day.
- A complete cost cap of 100% – you should never be asked to repay more than 100% of the amount of loan you have borrowed.
The price caps apply to the credit agreements with an interest rate of 100% or more each year.
There are also other addition al regulations which were brought into force in May 2017. According to these regulations, lenders have a responsibility to ensure they provide any relevant details of their products on a price comparison website, which has been authorised by the FCA. In addition, borrowers should also be provided with a summary of the cost of borrowing.
New rules relating to Continuous Payment Authority
In most cases, loan companies will ask you to repay the debt via a Continuous Payment Authority (also known as a CPA.) With a CPA, the company would be able to take money from your account for repayments.
There have been new regulations brought into place, regarding the CPA, which give debtors more control over their account. The new regulations state that if the CPA fails to be paid twice, the loan company would not be able to make any further requests to your bank account.
There have also been new rules put into place regarding the amount of money they will be able to take from your account using a CPA. They cannot take partial payments anymore, if they full amount is not in your account, they cannot take anything at all. The only way they will be able to take a partial payment is if you agree to this in advance.
Can’t afford to pay the loan? Here’s what you can do
According to the law, if you’re struggling to make repayments, lenders must:
- Provide you with information on where you can obtain free independent debt advice
- Hold off debt recovery for a suitable period of time, while you get a repayment plan in place
- Provide you with enough time to devise a repayment plan, without charging you any more.
Getting help with your debt
These are some of the organisations who will be able to provide you with free help and advice with your debt, and your finances in general.