natwest settlement fee

mrposhman

Hopefully someone out there can help me, else I will have to calculate all this on excel!!

basically I want to repay my loan today and have called natwest for a settlement fee. Ignoring the fact that the first guy tried to get me to pay the ENTIRE balance on my account and then cut me off and the next guy tried to sell me a new product (??) I've got the following queries.

I took out a loan in Oct 2007 for 5 years for a value of £10,000. I have been repaying £201.16 and paid a lump sum of £1200 on 28th July 2008. The rate I got was 7.9% APR.

I rang for a settlement quote on 13/11/08 and was provided a figure of £7,166.22 and then phoned again today (now that the capital is available) and was told it was £7,002.83. Now I know that the interest is front loaded and I am paying interest and capital off per month so I would have expected a slight difference between (last time - repayment = new settlement) but I didn't expect it to be as much as £40.

Now I tried to get the information out of Natwest in order to understand how the settlement figure is worked out but all they could do is say "we can't see that information and we can't provide it to customers". Not very clear and transparent!!

Can anyone provide me with an explanation for the change between the quote on 13/11/08 and today??

I will try my spreadsheet if not but hopefully someone can put my mind at ease though I think that their settlement figure is rather strange especially as the penalty (2 months interest) should be slightly reduced due to a lower capital balance.

Thanks in advance

_Andy_

To clarify - are you saying you feel the settlement figure should have been higher?

CLAPTON

well you probably owe about 7,000

so you pay 7000 x 7.9%/12 in interest a month i.e. £46
your monthly payment is 201 so you have repaid capital of 201-46 = 155 approximately in one month

and interest is 'front loaded' in the same way as mortgage interest in front loaded... and savings interest in fronted loaded i.e. the more you owe the more you pay in interest

mrposhman

CLAPTON wrote: »

well you probably owe about 7,000

so you pay 7000 x 7.9%/12 in interest a month i.e. £46
your monthly payment is 201 so you have repaid capital of 201-46 = 155 approximately in one month

and interest is 'front loaded' in the same way as mortgage interest in front loaded... and savings interest in fronted loaded i.e. the more you owe the more you pay in interest

thanks, i worked something similar out in my head on the way home from work.

I guess I'm a bit miffed that the bank can't provide splits between capital and interest within the settlement figure being as I'm paying the remainder of the capital and 60 days interest.

I thought the figure was about right but wanted to know specifically how the bank got from last months settlement figure to the 1 I got today!! It kind of surprised me that they can't provide this. I thought it would have been under the umbrella of the FSA to ensure transparancy for customers.

CLAPTON

why not try writing and asking ? it does indeed seem absurb that its not a standard procedure to send the settlement calculation details .. it should only be a matter of rpinting them out after all.

mrposhman

CLAPTON wrote: »

why not try writing and asking ? it does indeed seem absurb that its not a standard procedure to send the settlement calculation details .. it should only be a matter of rpinting them out after all.

Yeah I would agree.

I think I might write to them but I'm just trying to work the calculations out myself and go to them with these. At first looks it looks like the settlement figure (including 58 days interest) is about £160 higher than I calculate.

Maybe its a problem with my daily interest rate. I have calculated this at APR/365. I know that this isn't the way to do it on savings interest as the gross rate is different to AER, is there a similar thing with regards to APR?