Bank Loan interest

[Trajan]

Hi to all, I borrowed just over 17000 from NatWest to repay it back over 28 months. As I was checking my Loan account I kept seeing interest charges to my loan account every month.

 

My repayment is £696 every month, but where did the £142 interest charge come from? Isn't the interest included in the £696 anyway?

 

Is this normal? I will be totally shocked if this normal because every month after I pay £696 back, they charge £142 straight away.

 

Can someone explain this to me?

 

[Mr lex]

Hi Trajan,

 

Can you let us know what the APR rate is ?

 

I am having problems trying to work this out.

 

Lex

[yourbank]

Is the bit you have posted for the Loan account?

[yourbank]

Is it a fixed rate loan or graduate loan?

[Trajan]

I topped up my previous loan of £13.500 to £17.300 to repay it over 28 months. The APR is 10.5%. it was 9.1, but because of my credit rating it jumped to 10.5%.

 

My monthly repayment is £696.14 (it says 695.80 on the agreement) It is a personal loan account. Fixed rate.

 

It says on the loan agreement total interest £2182.40. Total amount payable £19482.

 

696*28=19488

 

Where is the £142 coming from?

[yourbank]

Ok, it sounds like risk band pricing. I still don't get the way they have done that. I will explain, normally what will happen on loans will be the old loan is closed and a brand new one set up with the old loan closed. The above statement is from the loan? It does not make sense to me.

[Trajan]

Thats whey did. I closed the old loan of 13500 and opened a new one worth 17.300. I paid the early redemption charge as well. I still don't understand this charge of 142. I wonder I could also claim the early redemption charge as well? It was around 300 quid i think.

[yourbank]

The screenshot on page 1, is it the loan account?

[Trajan]

yes

[yourbank]

I have to be honest and say I don't know. I think you need to write to the bank for an explanation.

[Rhinoagainstcharges]

The £140 approx is the interest on the loan. As the loan progresses and the balance outstanding becomes less then this interest figure will also decrease. By the end of the loan almost all of the repayment will be of capital but for the moment a large part is of interest

[Fred_Funk]

It's exactly as Rhinoagainstcharges says.

 

My loans with NatWest have all operated on exactly the same basis. The monthly repayment doesn't change but the part of it which equates to interest decreases month by month.

 

Move on, there's nothing to see here!