High Settlement Figure

boothebirdy

I have a car loan with RFS that is due to finish June 07. I have already paid £4,235.25 on a loan of £7218.79 (£9147.00 including credit fees @ 11.6% APR) I rang up to request a settlement figure and I quoted £4799.49, that seems rather high to me as I worked out I would only be saving £112.26 by paying early. Does that seem right? I could probably earn more in interest by saving that money than paying it off early. :rolleyes:

Thanks

o_t_e

Hi Boothebirdy - there's no harm in querying it and asking for a breakdown of how your previous payments have been allocated, but it may well be correct, due to front loading of interest - basically the interest is the companies profit on the deal so your payments initially are mostly paying off the interest - as the interest outstanding diminishes you start paying off what you originally borrowed. As I say, if you've just got a final figure ask them for more information - they don't offer it immediately as while the settlement figure is computer generated a comprehensive explanation has to be done by a human!