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Taken HSBC loan today - Info required


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I took a £7000 personal loan over 60 months today and the loan has drawn drown..

 

I only plan to have the loan for a month (max 3 months).

 

The interest is front loaded - from what i have been told I can repay the loan at any time and the interest i'd pay is for the period i've had the loan + 2 months...does anybody know if this is the case or would this work out an expensive option as the loan is front loaded??

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Hi

 

On a loan yoou pay more in interest in the early months and less in the latr months purley beause the capital balance is higher in the early months.

 

Quick example £10k loan

 

Month 1, 10k outstanding...suppose interest at 1.5%pm. Month 1 interest = £150 so loan plus interest = £10,150. Month 1 payment is, say £200. £10,150 less £200 = £9,950. Month 2 interest is £9,950 at 1.5% = £149.25. Balance = £9,950 + 149.25 = 10,099.25. Month 2 Payment = £200, balance now £10,099.25 - 200 = £9,899.25.

 

And so on

 

ims

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ok i understand (i think!) - so if i paid back the loan after 1 month for example, it'd cost me 1 months interest + 2 months for clearing early?

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You got it :thumb:

 

ims

If I have helped you please leave me a message by clicking my star

 

1. Single Premium PPI Q&A Read Here

2. Reclaim mis-sold PPI

Read Here

3. Reclaim Loan & Credit Card Charges Read Here

4. The CAG Interest Tutorial

Read Here

5. Feel Bullied by Creditors or Debt Collectors?

Read Here

6. Staying Calm About Debt

Read Here

7. Thinking of a Full & Final Settlement?

Read Here

 

How To Upload Documents To Cag

Instructions

 

I DON'T GIVE ADVICE BY PM BUT IF YOU SEND ME A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER HELP THERE

 

 

 

Private message facilities are offered for users to communicate issues that are perhaps inappropriate for posting on the main forum. Site rules explain this in more detail.

 

If you receive a private message which you consider abusive, derogatory or otherwise inappropriate, whether it be about yourself or other members, please report it using the "report" icon

 

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my views are my own and are given in good faith to try and help people. Please seek professional advice on your case if necessary

 

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Thanks - I thought as it was front loaded it wouldn't work like that as you pay interest at the start of the loan? Therefore when you get to a certain point in the loan, you'd have paid all the interest off before the end of the term..?

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Hi

 

I see what you mean but it doesn't work like that unfortunately.

 

Front Loaded simply means that you pay more in interest in the early months than in the later months as described above.

 

Simply put, in the early months more of your monthly payment is going to interest rather than against the capital balance.

 

ims

If I have helped you please leave me a message by clicking my star

 

1. Single Premium PPI Q&A Read Here

2. Reclaim mis-sold PPI

Read Here

3. Reclaim Loan & Credit Card Charges Read Here

4. The CAG Interest Tutorial

Read Here

5. Feel Bullied by Creditors or Debt Collectors?

Read Here

6. Staying Calm About Debt

Read Here

7. Thinking of a Full & Final Settlement?

Read Here

 

How To Upload Documents To Cag

Instructions

 

I DON'T GIVE ADVICE BY PM BUT IF YOU SEND ME A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER HELP THERE

 

 

 

Private message facilities are offered for users to communicate issues that are perhaps inappropriate for posting on the main forum. Site rules explain this in more detail.

 

If you receive a private message which you consider abusive, derogatory or otherwise inappropriate, whether it be about yourself or other members, please report it using the "report" icon

 

If you are approached (or have been approached) by private message with an offer of help "Off Forum" or with a view to asking you to visit another website, please inform the site team via the report icon, especially if this results in a request for a fee. Remember, this is for your own protection

my views are my own and are given in good faith to try and help people. Please seek professional advice on your case if necessary

 

PLEASE HELP US TO KEEP THIS SITE RUNNING

EVERY POUND DONATED WILL HELP US TO KEEP HELPING OTHERS

 

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