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  • FIRST POST
    • Ascheapaschips
    • By Ascheapaschips 11th Oct 16, 9:30 PM
    • 6Posts
    • 1Thanks
    Ascheapaschips
    APR rate doesn't add up
    • #1
    • 11th Oct 16, 9:30 PM
    APR rate doesn't add up 11th Oct 16 at 9:30 PM
    Hi,

    My wife and I recently applied for a loan and were approved at APR 3.2%.

    We got the paperwork through but the figures don't add up to us! We were expecting interest to be £400 odd (based on 3.2 markup) but the interest being applied is quoted as £1,100 on the paperwork and is above 8.1% based on my calculations.

    Am I missing some technicality applied to loans? There are no "hidden extras" from what I can see. Nothing like payment protection or the likes.

    Any advice would be appreciated.

    Many thanks.
Page 1
    • zx81
    • By zx81 11th Oct 16, 9:31 PM
    • 9,313 Posts
    • 9,137 Thanks
    zx81
    • #2
    • 11th Oct 16, 9:31 PM
    • #2
    • 11th Oct 16, 9:31 PM
    What are the figures on the agreement? Amount, term, rare etc.
    • Ascheapaschips
    • By Ascheapaschips 11th Oct 16, 10:19 PM
    • 6 Posts
    • 1 Thanks
    Ascheapaschips
    • #3
    • 11th Oct 16, 10:19 PM
    • #3
    • 11th Oct 16, 10:19 PM
    Thanks zx81 but I think I've got it now. It's a 60 month loan and it's how it spreads out year on year.
    • jonesMUFCforever
    • By jonesMUFCforever 11th Oct 16, 10:21 PM
    • 23,176 Posts
    • 10,530 Thanks
    jonesMUFCforever
    • #4
    • 11th Oct 16, 10:21 PM
    • #4
    • 11th Oct 16, 10:21 PM
    I wonder id the OP worked out the interest for one year not the term of the loan.
    What goes around - comes around
    give lots and you will always receive lots
    • Caz3121
    • By Caz3121 11th Oct 16, 10:49 PM
    • 9,957 Posts
    • 6,522 Thanks
    Caz3121
    • #5
    • 11th Oct 16, 10:49 PM
    • #5
    • 11th Oct 16, 10:49 PM
    Thanks zx81 but I think I've got it now. It's a 60 month loan and it's how it spreads out year on year.
    Originally posted by Ascheapaschips
    that will be it
    a £12.5k loan over 12 months @ 3.2% would cost £400 in interest
    a £12.5k loan over 60 months @ 3.2% would cost £1,043.20 in interest
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