Northern Rock settlement figure - 2nd try

quisait

Evening folks

2nd try on this as my first attempt seems to have been doomed.

Last week I asked Northern Rock for a settlement figure on my loan. The figure that they gave me seems to be around £200.00 higher than where I think it is.

For over a year now I have been using a loan calculator which allows you to add in extra amounts in order that you can predict your settlement figures.

This calculator was fine. It was accurately predicting what my settlement would be and in most cases was MORE than what NR gave to. That was until the last few settlement figures quoted. The gap has reversed the other way, which I am none too pleased about.

My loan calculator with all of the figures paid and settlement figures given can be found here: http://www.hey4q2.demon.co.uk/NorthernRock.xls

When I called them up last week I was informed that the interest on my loan had been front loaded.

There is nothing in my terms and conditions as to how they calculate the interest.

Details of my loan are as follows:

Amount: £20,000.00
PPI: No
Monthly payment: £239.16
Loan period: 10 years
Total charge for credit: £8,699.20
APR: 7.9%

I'd really like to get an answer on this so as to know whether or not I pursue them.

Can someone out there with knowledge on these things help?

Thank you

Jools

jonesMUFCforever

Any early settlement fees to be applied (normally 2 months interest) ?

quisait

According to the terms and conditions it says:

Rebate on early settlement - If the outstanding balance of the Total Amount Payable is repaid early you may be entitled to a rebate of charges. Details available from NR.

Been poking around the site and it appears that my loan has been calculated using Rule 78. I determined this by using a Rule 78 calculator found here: http://www.hughchou.org/calc/rule78.cgi

Put it loan amount of £20000, monthly payment £239.16 and 120 months of payments and bam exactly the amount of interest that they charged me in the first place.

Still doesn't resolve my original query though

quisait

Hi folks

Just called Norhtern Rocj to gather some information.

They have confirmed that when my loan was took out they used the Rule of 78 to calculate the interest.

They stated that the terms and conditions of my loan were changed but they never notified as they said "at the term it wasn't required by law".

They say that they now use the actuarial method to work out settlement figures.

The question still stands. Am I being screwed over by this lot and do I have any comeback?

I'd really like some advice on this. Please!

jonesMUFCforever

Lets put it this way I would not bet one penny of my money to try and prove they are right and you are wrong.

quisait

Uh, OK.

So is that "yes, go get them" or "no, you haven't got a cat's chance in hell"

???

jonesMUFCforever

no, you haven't got a cat's chance in hell"