Are Northern Rock screwing me?

quisait

Hi folks

I have a loan with Northern Rock that I am plowing a lot of extra money into.

Today I have been given a settlement figure that seems to be way over what it should be and I can not make out why.

Speaking to a manager at Northern Rock he told me that my loan had been front loaded with interest when I took it out.

I can not think for the life of me why the settlements figures are like they are.

As an aside. I downloaded a spreadsheet that has been pretty been on the nail for settlement figures. This year they have started drifting from the spreadsheet. Today's was the last straw. It was around £170 more than predicted! Before, the spreadsheet was predicting figures above theirs and now it has been reversed.

Am I being screwed? Do I have any comeback on this?

All they said was "read the terms and conditions".

Any ideas? Also, is there a way to post the spreadsheet (I can't do this until later as I am at work)?

Thanks

Jools

chalkie99

I think you would have to give a bit more information such as loan amount, loan period, months paid and settlement figure quoted for an informed response although, yes, front loading of interest is normal.

quisait

Evening all

OK. Now I am at home I can provide more information to yourselves

The original loan amount was £20,000.00 over 10 years. The standard payment every month is £239.16. The first loan payment was 25/06/2004.

To make things easier I have given a link to the spreadsheet that I am using so that people can clearly see what I have paid each and every month.

Please ask any questions that you think are relevant. I really want to know what is going on with this one.

Thanks BIG time

Jools

http://www.hey4q2.demon.co.uk/NorthernRock.xls

CLAPTON

loan was 20k
period is 10 years
monthly payment is 239.16

APR is ?
any PPI?
any payment free months at the beginninjg of the loan?

what early settlement figure are you querying?

quisait

APR is 7.94%
No PPI
No payment free months at the beginning of the loan

I am querying the early settlement figure for October 2009. The spreadsheet reckons that it was around £4230 they gave me £4404. That is a significant difference.

When you look at the settlement figures predicted on the spreadsheet you will see that for a number of months it was higher than what NR gave me. Now it has reversed, and quite significantly.

MarkyMarkD

You basically don't save any interest by overpaying. You only save interest by redeeming the loan early.

So your calculations are wrong, because they are deducting the overpayments from the interest bearing balance. That's not how it works.

Overpayments are effectively prepayments of monthly payments not yet due.

CLAPTON

you borrowed 20k over 10 years

you are 5 years into the loan and you say that the settlement figure is 4,404?

bite their hand off.

quisait

OK. But can you explain why the loan calculator was pretty much dead on and now things seem very skewed?

I'm also curious in that in the previous two month period I paid a lot less extra yet I still seem to have bene charged a similar amount in interest.

Sorry. I just don't believe that NR are right and that somehow thngs are skewed.

A while ago someone else on here mentioned they had a similar problem with NR and their settlement figures.

milliemonster

Yes, rather than overpaying a loan you are better off putting the overpayment money into a savings account and saving up the money needed to settle the account in full, only then will you get an interest rebate

milliemonster

quisait wrote: »

OK. But can you explain why the loan calculator was pretty much dead on and now things seem very skewed?

I'm also curious in that in the previous two month period I paid a lot less extra yet I still seem to have bene charged a similar amount in interest.

Sorry. I just don't believe that NR are right and that somehow thngs are skewed.

A while ago someone else on here mentioned they had a similar problem with NR and their settlement figures.

because your interest amounts are worked out at the beginning of the loan and will be charged until the loan is repaid in full irrespective of any overpayments paid during the loan term

CLAPTON

milliemonster wrote: »

because your interest amounts are worked out at the beginning of the loan and will be charged until the loan is repaid in full irrespective of any overpayments paid during the loan term

this is simply incorrect.. it's against CCA rules
but the poster hasn't posted correct figures for us to check.