Help understanding interest please :(

[redmanmark86]

Hi there,

 

i have a credit agreement and im trying to work out how they came to me paying them 53.72 a month and how they got to the interest they did but all of it goes over my head... so if i give the figures hopefully you guys can help me work or would it be easier to post the agreement itself?

 

Also if the amount im paying back doesnt add up does it void the agreement?

 

anyway here is what i have...

 

Amount of Credit 1247.00

48 Monthly repayments each of 53.72

first repayment due 12 months after advance date.

 

Total amount payable 2978.56

APR 29.8%

 

then in a seperate called other fincial information i have this...

 

Computer Equipment

with a cash price of 1647.00

advance payment payable by you 400.00

Total Charge for credit 1331.56

made up of interest 1331.56

 

but no matter what i do the online APR calculators dont give them same

Edited July 16, 2009 by redmanmark86

[redmanmark86]

please, surely someone knows the correct way of working out interest?

[redmanmark86]

ok i have even used the FSA website and it still coming up a lot smaller...

 

so if they arecharging me more than they should, where do i stand? also i dont have the original terms that go with the agreement and they cant provide me with them?

 

Can i challenge this agreement?

[dx100uk]

you've been ripped off!

 

they have calculted the whole loan on the full price of the item and not taken off you deposit.

then they have calculated the loan, and taken off your deposit.

 

go get 'em.

can you scan it and post it to photobucket then post the link

remove all pers details first

 

who are these jokers!!!

 

 

dx

[enamae]

they have calculted the whole loan on the full price of the item and not taken off you deposit.

then they have calculated the loan, and taken off your deposit.

 

dx

 

Sorry to disagree dx but I think it may be something to do with the fact that payments were deferred for 12 months. The monthly payments would therefore have been calculated on the £1247.00 balance + 12 months interest.

 

enamae

[redmanmark86]

Here ya go

 

 

 

So far all i have paid is the 1247 as i always felt something wasnt right, mainly the fact the interest was higher than the credit itself...

 

But now they are really hounding me and are saying if i dont start paying up soon they will take me to court, also they have now stuck it in default and started adding default charges...

 

they are clysdale fianance who are now apart of Barclays Partner Finance. I CCA'd them and they stuck my 1 pound payment towards the debt even though i wrote in size 16 font in bold not to use it for any other purrpose!!!!

 

so far all they have provided me with is a statement of payments, and the original agreement but not original terms and conditions.

Edited July 16, 2009 by redmanmark86

[redmanmark86]

Sorry to disagree dx but I think it may be something to do with the fact that payments were deferred for 12 months. The monthly payments would therefore have been calculated on the £1247.00 balance + 12 months interest.

 

enamae

 

according to the FSA calculator, even at 48 months the interest is only 901.22

 

if i do it over 60 months its 1,164.50

 

but never anywhere near 1331.56 unless i do it at 1647 but it still doesnt add up...

[enamae]

If you take the loan figure of £1247.00, add on the Interest of £371.61(29.8%), the actual figure that would have been used to calculate the monthly payments is £1618.61.

 

This will not give an exact figure but it should be quite close.

 

enamae

[redmanmark86]

If you take the loan figure of £1247.00, add on the Interest of £371.61(29.8%), the actual figure that would have been used to calculate the monthly payments is £1618.61.

 

This will not give an exact figure but it should be quite close.

 

enamae

 

still doesnt add up,

 

i got monthly repayments of 58.09, total paid for the price of the loan 2,788.39, and total interest 1,169.78...

 

thats with your figure at 48 monthly payments to account for the first 12 being deferred....

[dx100uk]

i'll come back to this tomorrow

but the way i calculated it, my figures worked out correct to the figures they are quoting.

 

they have not calculted the loan int on the -400 figure, they have taken it off after calculating the full 29k loan.

 

just do the mts * the payment ....it tallies exactly with the full price

 

he has been ripped off.

 

dx

[redmanmark86]

i'll come back to this tomorrow

but the way i calculated it, my figures worked out correct to the figures they are quoting.

 

they have not calculted the loan int on the -400 figure, they have taken it off after calculating the full 29k loan.

 

just do the mts * the payment ....it tallies exactly with the full price

 

he has been ripped off.

 

dx

 

thanks Dx, in the mean time should i start paying them again to stop the defaults?

 

Also what is the chance that ill get out fo this mess?

 

I don't understand their maths and how 1647 became 2978.56, but i do understand yours and your right, 53.72 x 48 + 400 is their figure...

Edited July 16, 2009 by redmanmark86

[enamae]

I'm a bit confused about this as I've now found 4 other threads about the same agreement.

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/198431-please-help-barclays-partner.html

 

Letter from Barclays Partner Finance dated 4th May 2009 stating that you are in arrears by £107.44 = 2 months at £53.72.

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/207914-carclays-partner-finance-cca.html

 

Letter from Barclays Partner Finance dated 9th June 2009 stating that you are not in arrears

 

Direct Debit Mandate signed by you 14th July 2006 (signed by Clydesdale Financial Services 12th July 2006 date stamped as received back on 3rd January 2007)

 

Statement of Account

Money advanced on 4th January 2007 - £1247

Interest Payable if not paid off in full within 12 months of Advance - £1331.56

 

Payments covering the Initial advance of £1247 were completed on 23rd June 2008.

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/208632-help-please-qucik-question.html

 

Same information as Previous thread

http://www.consumeractiongroup.co.uk/forum/getting-out-debt/209559-confused-interest-please-help.html

 

Same Information as Previous threads

 

 

Reading through them if the advance was made on the 4th January 2007, all payments needed to be made before the 3rd January 2008 to avoid paying any interest.

 

As to the Monthly Payments, I still think this is because the interest for the first 12 months was added on to the advance before calculating the total interest. The difference between this (£371.61) and the deposit of £400.00 is only £28.39.

 

enamae

[dx100uk]

right well i'm not spending anymore time on this when the OP keeps starting new threads all over the place & only feeds half the info history.

 

my mistake should of looked at any other posts by them first.

 

wasted a mornig trying to work this out for you.

 

thanks

 

unsubbling

 

dx

[redmanmark86]

right well i'm not spending anymore time on this when the OP keeps starting new threads all over the place & only feeds half the info history.

 

my mistake should of looked at any other posts by them first.

 

wasted a mornig trying to work this out for you.

 

thanks

 

unsubbling

 

dx

 

if you look at the dates of the threads you will see they have big differences between them... The first one was before i ever got a response from them as was just a general question about BPF and where i would stand...

 

the 2nd was when i got a response and i wanted advice on the agreement in general but their wasnt much around

 

and the latest two have been purely about helping me calculate the interest because i don't understan how they got 1331.56, ive even tried lookign dor dualcalc or whatever it is called to help do it myself.

 

I havent made multiple posts to try to confuse people or mislead (why would i do that when i want help), ive just started a new post when i have a direct quetion, like the last couple were about the agreement itself. This was purely about the interest and hence why i never posted the agreement in the first post as i thought calculating the interest was a quick and simple thing (obviously not)...

 

and the reason i posted it in two different sub forums was ebcause i couldnt work out when on earth to stick it so i thought i'd stick it in both...

 

I'm sorry if it feels like i have tried to fool you but i haven't, and i'd still greatly appreciate your help in trying to resovle this I never meant to **** anyone off...

 

P.S. i have noticed one thing that doesnt seem rightm the APR and the interest rate per year are exacty the same and shouldnt they be different?

[redmanmark86]

ok i just spoke to BPF on the phone ot pay one of my installments, whilst on the phone to him i asked him if he could calculate the itnerest for me, he went quiet for a while and said he was going to have to refer (basically he couldnt get to their figure either).

 

He did however confirm it is only a 4 year contract and the interest started from the date the interest free peroid ended not from befoe the advance date.

 

When i told him other websites had calculated the interest differently he got really angry at me and told me i was tlaking rubbish and the FSA had no calculator, i gave him the link on phone and he said its not the FSA but a micky mouse site, i pointed out the fsa.gov.uk bit in the addess befor emoneymadeclear but he got even more angry, and just hung up

 

anyway so now we know the interest is calculated from the end of the advance date can i please have some more help?

[babybear39]

Hi

 

I've flagged your thread for someone with more expereince with interest calculations to get back to you.

[redmanmark86]

Hi

 

I've flagged your thread for someone with more expereince with interest calculations to get back to you.

 

thank you babybear,

 

i have dualcalc now, but my god i cant understand it at all so hopefully someone will see your flag and help me...

 

I find it so funny how nice he was till after he went quiet to work out the interest, then he got aggressive and started saying things like

 

"you signed the agreement, so even if its wrong you have to pay it"

 

 

If its wrong do i have to pay it?

[enamae]

I've managed to replicate their figures by using the following Calculators.

 

APR Calculator -using this you get a Nominal Interest rate of 26.36%

 

 

Deferred Payment Calculator - Using This Calculator, shows that the Principle will alter from £1247 to £1,583.69 after the interest free period has passed. It also shows that the total interest payable over the term of the loan is £1,331.47 with a monthly payment of £53.72

 

FSA Loan Calculator - By inserting the new Principle amount of £1,583.69 and the Nominal Interest Rate of 26.36 this confirms the Monthly Payment of £53.72 and total payable over the term of the loan as £2,578.51. Add on your £400.00 deposit and you have a total amount payable of £2978.51.

 

Although the above confirms their figures, as you paid the principle of early, I think you might not be liable for the total interest they are claiming.

 

You should Send a SAR request asking them for all the information they hold on you including confirmation of how the early payments were applied to your account.

[pulu31]

I hope that this helps:

 

Starting with;

(1 + r)^12 = (1 + R)

 

where r = monthly nominal interest rate

R = APR

^ indices (power of)

 

ð r = (1 + R)^0.08333 – 1

 

note: 0.08333= 1/12 (the 12th root)

 

substituting your figures we have

 

r = (1 + 0.298)^0.08333 – 1

=> r = 0.02197

 

Nominal annual interest rate = 0.02197 * 12 = 0.2636

 

i.e. 26.36%

 

 

However, in this case, it appears that this figure has been ‘rounded up’ to 27% (naughty)

 

So, after 1st year of loan, amount owing (Principal) is;

 

1247 * 1.27 = 1583.69

 

Regards

Dr. B

[pulu31]

Oops! there is a blue smiley thing which keeps appearing in the line after "substituting your figures" which I cannot get rid of. Line should read:

 

r = (1 + 0.298)^0.08333 – 1

[pulu31]

Its done it again!

 

The first parenthesis is

 

1+0.298

 

I hope old smiley does not appear now.

[redmanmark86]

has anybody ever told you guys that your absolute genuis, though pula31 went right over my head (was never the strongest at maths) but gonna try later at work...

 

They told me on the phone how they applied my payments, basically they didnt apply my payments...

 

instead they took 53.72 from my payments each month up until 3rd July 2009, where they now want me to carry on making the rest.

 

is that even legal, to treat all my payments as a giant kity and then just take 53.72 from the total 1257 i paid rather then applying it instantly to my account?

[pulu31]

Redanmark86, I have shown again but with all the inbetween bits inserted. I hope that you can now follow down each step.

 

(1 + r)^12 = (1 + R)

 

where r = monthly nominal interest rate

R = APR

^ indices (power of)

=> implies that

 

(1 + r)^12 = (1 + R)

Taking the 12th root of each side

ð 1 + r = (1 + R)^1/12

subtracting 1 from each side

ð r = (1 + R)^0.08333 – 1

 

note: 0.08333= 1/12 (the 12th root)

 

substituting your figures we have

 

r = (1 + 0.298)^0.08333 – 1

=> r = (1.298)^0.08333 - 1

=> r = 1.02197 - 1

=> r = 0.02197

 

Nominal annual interest rate = 0.02197 * 12 = 0.2636

 

i.e. 26.36%

 

 

However, in this case, it appears that this figure has been ‘rounded up’ to 27% (naughty)

 

So, after 1st year of loan, amount owing (Principal) is;

 

1247 * 1.27 = 1583.69

Edited July 17, 2009 by pulu31

[redmanmark86]

ok makes more sense now,

 

are they legally allowed to round it up to 27, plus the only interest rates i can find anywhere on the agreement its 29.8?

 

also where do i stand with them not applying the 1247 to the account but instead just taking 53.72 from it each month for the last year?

 

Thanks for the help,

 

Mark

[pulu31]

Hello, The 29.8% is the APR whilst the 26.36% is the Nominal Interest Rate. This is normally applied to deferred loans to counter balance a lenders loss due to (example) inflation.

I don't know if it is legal to round up or not. However, lots of software, dealing with small and large amounts, are known to round up. It depends upon how the program was written.

Regards

Edited July 17, 2009 by pulu31