incorrect interest amount on loan document.

[kalliste]

Hi everyone.

 

This is my first post to the forum, and I'm hoping to get some information about challenging loan interest amounts.

 

My partner showed me her Cooperative Bank Loan documents (taken out when we moved in together about 18 months ago), which are in her name.

After looking at the amounts, something didn't add up, so I used a couple of loan calculators (including the one on the FSA website)

 

I followed the instructions, including putting the actual interest rate, not the APR, and it comes up clear on all the loan calculators.....the interest amounts and repayment amounts are wrong!

 

Therefore, I'm looking for 2 things:

 

1) confirmation that i'm not being stupid and haven't missed something obvious.

 

2) any advice on how to challenge this, and success stories that anyone may have.

 

The info is this:

 

The bank loan documents say:

£3500 loan with no PPI over 48 months

47 payments at £111.40 with a final payment at £111.07

total amount repayable = £5346.87 (total interest is £1846.87)

APR 21.4%, actual interest rate 20.36%

 

 

The online calculators say:

the total amount at 20.36% should actually be £5144.58 (total interest is therefore £1644.5:cool: at the interest rate of 20.36% and regular payments of just £107.18.

 

 

Now this may not seem much, but the way I look at it, they are doing us out of £200. If I did that, they would send me loads of letters, and charge me a fortune, and probably affect my credit file....and somehow I'm not certain I'd get a government bail out if I had a problem.

 

Any advice would be greatly appreciated from those who are much more knowledgable than I.

 

I will continue to share my experience with the forum for others.

 

Thanks in advance.

[gemspan]

Hi there

 

Welcome to the forum. Was there a setting up fee? If not and you believe this to be completely wrong then I would get in touch with Consumer Direct or Trading Standards and ask them to work it out for you.

 

Good luck

Gemspan

[smvtuser]

The bank loan documents say:

£3500 loan with no PPI over 48 months

47 payments at £111.40 with a final payment at £111.07

total amount repayable = £5346.87 (total interest is £1846.87)

APR 21.4%, actual interest rate 20.36%

 

 

Was the first repayment deferred?

[kalliste]

Was the first repayment deferred?

 

First payment was in december 2007. loan was taken out back end of July 2007.

[42man]

They are allowed a small variance in the figures....these threads might help

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/169592-urgent-help-wanted.html

 

http://www.consumeractiongroup.co.uk/forum/general-debt-issues/168115-mathematicians-needed-help-credit.html

[kalliste]

Thanks for that.

 

I have applied an additional 1% to both the APR and the Interest calculations, and they still come to less than the repayment amount.

 

I have written a letter to the bank asking them to confirm the interest charges.

 

Is it acceptable at this point to put it in dispute?

 

If in dispute, should I hold off making further payments until it's settled?

 

Thanks so much to everyone who has been helping with this...much appreciated.

[42man]

You could by all means dispute it, my feeling is that if the figures are outside the tolerances allowed it may well be unenforceable !!

[smvtuser]

First payment was in december 2007. loan was taken out back end of July 2007.

 

Without complicating things too much, if your payments started a month after you obtained the loan the APR would be 25.1%; deferring repayments for 4 months (still repaying the same amount in total), the APR drops to 20.7%. The APR reflects the timing of the charges as well as the rates and amounts.

 

By all means ask the bank to confirm their figures, but do not stop payments in the meantime.