Report: #668670

Complaint Review: Household Finance Company (HFC)

  • Submitted: Mon, December 06, 2010
  • Updated: Tue, December 07, 2010
  • Reported By: Rose — Harrisburg Pennsylvania United States of America
  • Household Finance Company (HFC)
    PO Box 3425
    Buffalo, New York
    United States of America

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Soon after moving into our home in 2005, our water well went out.  We needed about $5000 to have it repaired and running again.  We went to Household Finance Corp (HFC), here in Harrisburg for a loan.  First off, the lowest amount they would lend us was $10,000.00 that we really didn't need or could barely afford.   We really had no choice but to borrow the $10,000, because we had to have the well repaired or go without water.  We faithfully paid on that loan every month with an average amount of between $135-$150.  We were never late with one payment.  We could see that the interest on this loan was ridiculous.  They were only putting on average $15-$18 on the principle every month and the rest was going to interest.  They were killing us with interest every month, but there was nothing we could do because we signed for the loan.  They scammed us by requiring that we borrow twice as much as we needed to begin with and then ripped us off every month by taking almost the whole payment for interest.  After paying them for a little over 4 years, my husband retired and collected his severence pay from his job.  At last we could pay them off.  The balance on our last statement for November of 2010 was $9,195.71.  This was after 4 years of paying them over $130 a month.  So, we calculated that exactly $805 went on the principle in 4 years.  We paid roughly close to $7000 in interest for those 4 years.  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?  These loan companies, banks, etc., take advantage of people because they know they have you over a barrel.  You either agree to their terms of the loan or you don't get the loan.  What do you do when you need the loan?  You sign!  To get back to my story, we called HFC on November 16 and told them we wanted to pay the loan off and asked for a pay off amount.  We were informed that we had to write a letter to the payoff department requesting a payoff amount and wait for them to send it back to us before we could send the check in.  After waiting 2 weeks, we still didn't hear anything and the monthly payment was due.  So, we called again and were put off for another couple of days.  Finally, they gave us a payoff amount of $9,441.92!  Can you believe this?  It was $246.22 over the amount of our last statement.  If we could have just got a payoff amount when we called in November, which probably would have been closer to the $9,195.71, everything would have been fine.  But, they made us go through this whole letter writing scenerio, etc., which took almost 3 weeks and now they were trying to add more interest to our final payoff in the amount of the $246.22.  That is almost 2 months worth of monthly payments.  I just cannot believe that they make us wait to pay them off and then have the audacity to make us pay them interest for waiting.  I also cannot believe that our government lets these companies get away with ripping the citizens of this country off, namely, the middle and lower class.  The upper class do not need loans!!!!!  What is this county coming too?  I am so angry right now and with good reason.  My husband and I worked damned hard all of our lives to have a nice home and the minute something goes wrong and we don't have the money to take care of it, this government lets these companies do this to innocent people when they need to borrow money.  It is a shame and this government and these companies should be ashamed of what they do.  It is also a shame that people have no recourse. 
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#1 Consumer Comment

High interest loans

AUTHOR: Flynrider - (USA)

"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?  

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#2 Consumer Comment

You Are Absolutely CLUELESS!


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".

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#3 Consumer Comment

You could have made larger payments.

AUTHOR: MovingForward - (United States of America)

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?

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