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Am I being really thick? RE: Loan
Former Member
Posts: 1,876,323 The Mix Honorary Guru
OK I took out a loan of £2,300 on an 18 month term a few months back.
Repayments £149.05 a month = £2682.90 repayable, fine.
However, there's been an interest charge of, on average, £37 a month added onto the loan amount.
What happens after the 18 month period I agreed to when there's a surplus of (£37 X 18 months) £666?!
Worried can someone shed some light?
Repayments £149.05 a month = £2682.90 repayable, fine.
However, there's been an interest charge of, on average, £37 a month added onto the loan amount.
What happens after the 18 month period I agreed to when there's a surplus of (£37 X 18 months) £666?!
Worried can someone shed some light?
0
Comments
Did you miss any payments during the lifetime of the loan?
Read through all the small print earlier, no insurance on the loan and haven't missed a payment. Here's an quote:
Other financial information: Total charge (interest) £376.42 at 19.7% per annum
So £2300 + £376.42 = £2676.42, correct.
Yet no mention of any other charges?
No, the interest payable is calculated on the initial sum borrowed, not on the remaining unrepaid capital. Otherwise interest rates would have to be a lot higher to compensate. Therefore, assuming it is a fixed-rate loan, the interest payments should be the same throughout the lifetime of the loan.
OP - the only way you can find out is either do a Google search or better, call your bank and get them to explain it.