Northern Rock settlement figure

heidinthesand

Hi All

I'm hoping some of you kind folk on here could give some advice as I need to sort my finances out rather than keep on sticking my head in the sand, like I have done for the last few years.

My query is on a Northern Rock loan I took out and now hope to pay off, but I'm wondering if the settlement figure I've been given is right. The details are as follows:

£16000 loan taken out July 04 (1st payment made Sept 04)
6.9% APR - total amount payable £22,048.40
120 months at £183.57
No PPI taken
Settlement figure - £9,591.56 (as of today)
Already paid £10,830.63

Total amount payable - £20,422.19 but finishing the loan 60 months early.

I had hoped paying the loan of 5 years early would have saved me more then £1606.21. I can't find anything in my agreement (mind you it is only 1 page and very basic) about what would be payable at certain dates if I were to pay it off early, nor can I find anything about how an early repayment would be calculated.

If I'm wrong then fair enough, I'll pay what I'm due, but I'd be very grateful if any knowledeable member could give me a wee indication as to whether this is right - if only for my peace of mind!!

Cheers

j2009

Yes, those figures feel about right based upon the info you've given.

Your total charge for credit is 6k and you are settling half way through so saving 1.6k on interest instinctively feels right; as a proportion of your total monthly repayment more is used to pay off the interest towards the beginning of the loan than at the end.

Happy to fully model it if you need more convincing....

CLAPTON

yes I agree with j2009

the figures seem broadly correct ... the interest rate is very good and you pay a lot more interest in the early months as you owe much more and less interest in the later years as you owe a lot less... just like a mortgage.

heidinthesand

Oh well, at least I know that I'm not getting ripped off.

Thanks guys