We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Interest accruing but not included in o/s balance
Hi there - Hope someone can help with my query...
Outstanding loan with First Plus. Secured Loan.
Defaulted Sep 09
Sporadic payments made until regular repayments including extra for arrears started in June 10..never missed a payment since.
PPI Refund Claim settled in Oct 11 used to clear outstanding arrears completely. (With the excess being returned to us.)
Revised payments for restructured loan paid every single month since then.
The account is on my credit file as defaulted, just as I would expect.
My question is - when the loan defaulted, they stopped adding interest to the outstanding balance and just show the loan reducing by our monthly payments each month - which is obviously lower than the balance actually outstanding. Is this normal practice?
Suppose the outstanding balance showing on your credit report is £27,000 and monthly payments are £1000. The balance would go down to zero at the end of 27 months, but because there is still outstanding interest we would still be paying them our regular monthly amount - how would that then appear on the credit file?
I hope I have made sense...Thank you in anticipation...:D
Outstanding loan with First Plus. Secured Loan.
Defaulted Sep 09
Sporadic payments made until regular repayments including extra for arrears started in June 10..never missed a payment since.
PPI Refund Claim settled in Oct 11 used to clear outstanding arrears completely. (With the excess being returned to us.)
Revised payments for restructured loan paid every single month since then.
The account is on my credit file as defaulted, just as I would expect.
My question is - when the loan defaulted, they stopped adding interest to the outstanding balance and just show the loan reducing by our monthly payments each month - which is obviously lower than the balance actually outstanding. Is this normal practice?
Suppose the outstanding balance showing on your credit report is £27,000 and monthly payments are £1000. The balance would go down to zero at the end of 27 months, but because there is still outstanding interest we would still be paying them our regular monthly amount - how would that then appear on the credit file?
I hope I have made sense...Thank you in anticipation...:D
0
Comments
-
It could be normal. It varies by company. Some will add interest, some will be happy just to clear the debt once defaulted.
The only way you're going to know if you're being charged interest is to ask for a settlement figure on the debt. That will include everything, warts and all."One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
Because by then you've blown your chances. That's it."0 -
Thank you Mr Cow;)
I do know that interest is being charged as the last statement I had to *buy*:mad: from them showed an interest accrued but not yet applied figure.
What I can't get my head round is how it will work with the credit report! IE if they are charging interest when will it be applied to the balance on the credit report. I can potentially see it being whacked on at some point which will make it look like the balance has been increased and I worry that that will make it look even badderer :rotfl:than it already is. Yes, I know my credit history is trashed any way but I like to try and understand these things
0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.8K Banking & Borrowing
- 254.5K Reduce Debt & Boost Income
- 455.6K Spending & Discounts
- 247.6K Work, Benefits & Business
- 604.6K Mortgages, Homes & Bills
- 178.6K Life & Family
- 262.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards