TMAdvance loan settlement - are they right - Need help

[wiosna30]

Hello,

I had a Loan with them and after 18 Months paying them 4,230.00 ( borrowing £3.000) to close my account still I had to pay £3,111.00.

They won’t tell you that they 'front load' the interest, meaning you pay all the interest only first

I borrowed 3k 18 months ago,

paid them 4.3k already and still owe them 3.1k?

Essentially this means they are taking the interest for the final 18 months when in reality I want to settle it before then,

plus they charge you interest for a period of time in the future that has not even happened yet!

I attached my signed contract and I can’t see anywhere that I will pay first interest only.

Is this right?

Can they do this not stating anywhere on the Contract?

Can someone read this please and let me know if I am wrong.

I want to complain asking for some refunds,

I paid my loan earlier (just recently) and still was to repay more than I took.

I asked as well for breakdown on the end asking how my instalments have been calculated and final Settlement and Statements but I did not received any details!!!

Only this, please see below:

“We did receive the payment and your account is now closed.

I have attached a copy of your Transaction History.

Below is an explanation of how our settlement figures are calculated.

I have also attached a copy of your signed loan agreement showing the terms of the loan.

We charge the full amount of your interest at the beginning of your loan agreement.

This means that we do not charge interest on a daily or monthly basis.

You owe the total amount payable on day 1 and you are obliged to make payments monthly in line with your agreement.

If, however, you decide to settle your loan early (in full or partially) we are obliged to give you a rebate of some of the interest under UK law.

The consumer Credit act gives a complicated calculation of the minimum rebate of interest we need to apply.

The formula to calculate the rebate can be found at the following link…

http://www.legislation.gov.uk/uksi/2004/1483/regulation/4/made

This rebate is deducted from your current balance to calculate the settlement figure.

The rebate changes daily and you receive less rebate the further you are into your loan term.

If you have any further questions please let me know. “

Can they do this?

It’s any point send Complains to FOS?

Thank you

 

 

scan_2019-03-02-13-26-30.pdf

scan_2019-03-02-13-21-44.pdf

[Will Goodfellow]

The amount owed for the full 48 months is £11,280, you are being charged £7,341 so you have not been charged the full amount of interest due over that period. As you only took the loan out 18 months ago, there were still 30 months left and not 18.

Paragraph 2.2 of the Terms and Conditions also states:

"Unless otherwise provided in this Loan Agreement, all payments will be applied to default charges, interest, then capital."

So any payments which you make offset default charges and interest first before capital. Although as mentioned, the consumer credit act means you cannot be charged the full amount of interest if you settle the loan earlier.

 

[Peterbard]

No this how loans work . I shall attempt to explain.

There will be a repayment sum calculated  to repay principle and interest over a defined period, and at a constant rate.

The interest on the loan is calculated monthly on the reducing balance, so initially this will take up the major part of the repayment and in some cases only pennies are left to off the principle.

This accounts for the interest to appear"front loaded "as you say.

However it is equitable.  It is at the beginning of the term they are lending the most money.

As the loan progresses the principle will reduce ,and therefore so will the interest which is calculated on it.

Leaving more to come off the loan balance.

This is why if you cancel nearer to the onset of the loan, the interest will be greater.

The settlement calculator available on line calculates the sum remaining using the algorithm(accrual) shown in the regs.

[dx100uk]

I've sorted post 1 for you and updated the title too for clarity

 

dx

 

[Peterbard]

I find this to be quite accurate

 

http://www.financecalcs.co.uk/Calcs/Settlement.php

 

If you give me your interest rate or preferably the APR and the number of months the loan was over, I will calculate it for you

 

Ahh Just got your agreement to open.

Yes £3116.91 owed I am afraid.

 

149%APR Bloody hell

 

I wouldn't have thought this was not enforceable, I can have a look in the morning, if you like, or I am sure there are others on here.

 

[dx100uk]

as this is a version of a high int short term loan

I've moved the thread to the PDL forum.

 

dx