HSBC Loan

webmasterpolo

Hi,

Quoted by HSBC for a loan of £5000 paid back over 12 months.

APR 14.9%, no PPI

£448.87 per month

Total repayable £5386.43

Are this figures correct? Is the charge for credit only £386.43?

Cheers

-Web

Catch_A_Fire

Looks right to me. 14.9% i work out to be £386.32 but the actual apr is rounded or truncated to 1dp.

YorkshireBoy

For your 14.9% rate, http://www.whatsthecost.com/loan.aspx returns...

The bottom line, is that this loan for £5,000.00, over 12 months, will cost you £451.06 a month.

In taking out this loan, you'll pay a total of £412.67 in interest. The true cost of this loan is £5,412.67

...so your figures do look correct.

webmasterpolo

YorkshireBoy your link gives different figures.

Not to worry, happy now.

Cheers

Robert_Sterling_3

This loan is exactly as originally stated.
The actual rate of interest is exactly 14.9% Equivalent Annual Rate.
I found the monthly rate equivalent to the annual rate of 14.9%
I applied this rate at the end of each month and then subtracted the monthly payment at the end of each month.
At first sight you have been overcharged by 7 pence
However I do not expect banks to really use monthly rates
I expect them to use daily rates and this could account for the lost 7 pence.
The reason you are surprised that the interest is lower than you expected is
that the first month you owe £5000 and you can see in my table how the amount you owe each month decreases. The interest charged is £58.21
the first month and drops to about a fiver in month twelve.

Capital

---

Capital + Interest

---

Capital Interest - Payment
£5,000.00

---

£5,058.21

---

£4,609.34
£4,609.3

---

£4,663.00

---

£4,214.13
£4,214.13

---

£4,263.19

---

£3,814.32
£3,814.32

---

£3,858.7

---

£3,409.85
£3,409.85

---

£3,449.55

---

£3,000.68
£3,000.68

---

£3,035.6

---

£2,586.74
£2,586.74

---

£2,616.85

---

£2,167.98
£2,167.98

---

£2,193.22

---

£1,744.35
£1,744.35

---

£1,764.66

---

£1,315.79
£1,315.79

---

£1,331.11

---

£882.24
£882.24

---

£892.5

---

£443.64
£443.6

---

£448.8

---

£0.07


P.S.

It is not clear, to me at least, where YorkshireBoy is quoting from
but the figures given are not correct.

YorkshireBoy

webmasterpolo wrote:

YorkshireBoy your link gives different figures.

Robert_Sterling wrote:

It is not clear, to me at least, where YorkshireBoy is quoting from but the figures given are not correct.

I was using https://www.whatsthecost.com as a comparison* to see if the OP's figures were in the right "ballpark" - ie more of a sense check than disputing the accuracy of the HSBC quotation. I ended my post by saying "so your figures do look correct".

* The website does explain that there will be small errors due to the way that the APR is calculated - just over £2 a month as it turns out.