It all started when I received an unsolicited check from HFC in the amount of $5000.00. I did notice that the interest rate was for 28% but I figured that I would just pay it off early. I really needed this money because I had gotten wind that layoffs were coming soon at my job. Before cashing the check, I called HFC and asked them why the interest rate was so high. The rep stated it was because they had not "verifed" any of my personal information. She said that if I came into their office and fill out a formal loan application, they would reduce the interest rate.
After arriving at their offices, the rep stated that they couldn't reduce the rate with refinancing this loan. They said that they would also payoff several credit card balances on my credit report. So, in short, a $5000.00 loan turned into a $10,000.00 loan. I beleived the interest rate did drop but only to about 26%. After making all payments as scheduled, I would have paid over $18,000.00 total!
Well, I've been making payments of $300.00 per month since February 2005. I will admit that a couple of payments were sent in late (I was laid off as anticipated). The original balance on the loan was $10,000.00. It is now August 2005 and after having made 7 payments @ 300.00 each ($2100.00) the balance is now even higher - $10,300.00.
They apparently have some underhanded way of calculating late fees and interest. The good news is that I have found a much better paying job and have paid them $5000.00 twice this month; so now (hopefully) all that I owe them is a measley $300.00.
I wouldn't advise anyone to take a loan out with HFC; you can make your regular payments but your balance never decreases - IT INCREASES!