Please help.Calculation required.

[martin65]

Hello,

please can someone help.

 

Got a loan for £39090 over 300 months

Interest @9.84 pa or 0.82 per month.

 

NO missed payments.

 

Requested settlement after 13 months.

 

ERC @ 6 months interest.

 

QUESTION:How do I calculate the redemption figure???

 

Have painstakenly attempted 3 different versions and all come in lower than figure given by the Company concerned.

 

ANY HELP MOST APPRECIATED.

[Guest ian cognito]

I had the same issue a couple of years ago and when I questioned how they arrived at the figure, I was told it included administration fees, so you probably can't work it out just from the balance and the interest rate.

 

Worth asking them for a breakdown of it?

[GraemeC]

You need to have a look at your documentation as there are a number of ways to calculate the ERC

 

If you're lucky, it will be a simple '6 months interest on the original loan amount at XXX rate'

 

You should certainly be able to get a breakdown of what your costs would be were you to redeem

[martin65]

Hello,

why is it a 6 month interest at the original loan amount,should it not be a 6 month interest at the redemption date of amount O/S at that time.

[Guest ian cognito]

Well that would be the sensible and fair calculation, but we talking banks here!

[gizmo111]

Hello,

why is it a 6 month interest at the original loan amount,should it not be a 6 month interest at the redemption date of amount O/S at that time.

 

That is usually how it is - even on flex mortgages where you can overpay/underpay etc and leave the balnce at £1 - you still pay the ERC on amount borrowed to have their charge released.