Debt woman 'no idea' of interest

The couple took out their loan 15 years ago

A woman who took out a loan for £5,750 which spiralled to £384,000, has said she had "no idea" how much the interest was mounting.

Tony and Michelle Meadows, from Southport, Merseyside, took the loan with an annual percentage rate of 34.9% repayable over 15 years.

The pair have been taken to court by the debt owners, London North Securities, after struggling to pay.

The firm wants to take possession of the couple's house.

Mr Meadows, 45, works as a salesman for a windscreen firm, and his 44-year-old wife is a childminder.

The loan was taken out on a high-risk borrowers' rate.

'Extortionate rate'

On Wednesday, Mrs Meadows told Liverpool County Court: "Tony and I had no idea interest was accruing at such an extortionate rate."

Mr Meadows told the court yesterday he had taken out the loan to install central heating and convert a bathroom into a third bedroom.

The couple denies the loan was to pay off mortgage arrears of £2,400.

Mrs Meadows said she could not recall being under any pressure from the mortgage company to pay off the arrears despite the fact they had been served with a suspended repossession order.

She said: "I can't remember being under any pressure from anybody.

"Something like that would have been uppermost in my mind, I would have thought."

The case continues.