Loan payment holiday calculator

multiflorum

My apologies if this is elsewhere on the forums but I couldn't find what I was looking for.

I recently enquired about a repayment holiday on a personal loan that I have and was quite surprised to discover the amount of additional interest that would be incurred. Just wondering if someone could advise how the extra interest is calculated

Monthly Repayment £139.46
Payments left on loan 53
APR 24%

Additional interest to be repaid if one month payment holiday taken £237

zppp

multiflorum wrote: »

My apologies if this is elsewhere on the forums but I couldn't find what I was looking for.

I recently enquired about a repayment holiday on a personal loan that I have and was quite surprised to discover the amount of additional interest that would be incurred. Just wondering if someone could advise how the extra interest is calculated

Monthly Repayment £139.46
Payments left on loan 53
APR 24%

Additional interest to be repaid if one month payment holiday taken £237

What was the amount taken out and the term?

multiflorum

£5000 over 5 years

zppp

On the amortisation table I have here, I think the rate shoould be 22.5% on your agreement, but makes very little difference TBH.

Month Balance Principal Interest Paid Total Int.
1 £4,954 £46 £94 £140 £94
2 £4,908 £47 £93 £279 £187
3 £4,860 £48 £92 £419 £279
4 £4,812 £48 £91 £558 £370
5 £4,762 £49 £90 £698 £460
6 £4,712 £50 £89 £837 £549
7 £4,661 £51 £88 £977 £638 You are here
8 £4,609 £52 £87 £1,116 £725
9 £4,556 £53 £86 £1,256 £811
10 £4,502 £54 £85 £1,395 £897
11 £4,447 £55 £84 £1,535 £981
12 £4,390 £56 £83 £1,674 £1,065
13 £4,333 £57 £82 £1,814 £1,147
14 £4,275 £58 £81 £1,953 £1,228
15 £4,216 £59 £80 £2,093 £1,308
16 £4,155 £60 £79 £2,232 £1,387
17 £4,094 £62 £78 £2,372 £1,465
18 £4,031 £63 £77 £2,511 £1,542
19 £3,967 £64 £76 £2,651 £1,618
20 £3,902 £65 £74 £2,790 £1,692
21 £3,835 £66 £73 £2,930 £1,765
22 £3,768 £68 £72 £3,069 £1,837
23 £3,699 £69 £71 £3,209 £1,908
24 £3,629 £70 £69 £3,348 £1,977
25 £3,557 £71 £68 £3,488 £2,045
26 £3,484 £73 £67 £3,628 £2,112
27 £3,410 £74 £65 £3,767 £2,177
28 £3,335 £76 £64 £3,907 £2,241
29 £3,258 £77 £63 £4,046 £2,304
30 £3,179 £78 £61 £4,186 £2,365
31 £3,099 £80 £60 £4,325 £2,424
32 £3,018 £81 £58 £4,465 £2,482
33 £2,935 £83 £57 £4,604 £2,539
34 £2,850 £84 £55 £4,744 £2,594
35 £2,764 £86 £53 £4,883 £2,647
36 £2,677 £88 £52 £5,023 £2,699
37 £2,587 £89 £50 £5,162 £2,750
38 £2,496 £91 £49 £5,302 £2,798
39 £2,404 £93 £47 £5,441 £2,845
40 £2,309 £94 £45 £5,581 £2,890
41 £2,213 £96 £43 £5,720 £2,933
42 £2,115 £98 £41 £5,860 £2,975
43 £2,015 £100 £40 £5,999 £3,014
44 £1,913 £102 £38 £6,139 £3,052
45 £1,810 £104 £36 £6,278 £3,088
46 £1,704 £106 £34 £6,418 £3,122
47 £1,596 £108 £32 £6,557 £3,154
48 £1,487 £110 £30 £6,697 £3,184
49 £1,375 £112 £28 £6,836 £3,212
50 £1,261 £114 £26 £6,976 £3,237
51 £1,146 £116 £24 £7,116 £3,261
52 £1,028 £118 £21 £7,255 £3,283
53 £907 £120 £19 £7,395 £3,302
54 £785 £123 £17 £7,534 £3,319
55 £660 £125 £15 £7,674 £3,334
56 £533 £127 £12 £7,813 £3,346
57 £403 £130 £10 £7,953 £3,356
58 £271 £132 £8 £8,092 £3,364
59 £137 £134 £5 £8,232 £3,369
60 £0 £137 £3 £8,371 £3,371

I would hazard a guess that the figure you have been given is approximately the interest, which will be added to the next payment, as the amount of interest is approx £90. £90 + £140 = £230

multiflorum

Thanks for the quick reply I was told that at the end of the normal loan term there would be one extra payment of £139 to replace the payment I had missed plus another payment of £237 to cover additional interest

zppp

Yeah, so what you have done is added a payment to the end of your loan, and your next payment on your loan should be £237 rather than £139. That means come the end of your loan you have paid the extra interest plus completely up to date with all of the loan repayments.

multiflorum

Sorry I know I'm being a bit thick but I have to admit I'm still a bit confused.

I was told my loan will carry on as per normal with the normal monthly payments of £139. There will be one extra payment of £139 at the end of the normal period to cover the missed payment then another payment of £237 solely of additional interest.

In a nutshell it will cost me an additional £237 to take a one payment holiday

zppp

£237 does not equate to one month's interest, as per the table I posted above.

So my understanding is that your next loan repayment should be £237, which is your normal monthly repayment plus the additional interest on your loan that I calculated above. Then you will have your missed loan payment at the end of your loan.

multiflorum

Thanks very much for your help and patience.

Just double checked with the bank and told that the loan will carry on with payments of £139 as per normal per month. The month after the loan would normally finish in 2015 there would be one payment of £139 to make to replace the missed payment. The month after that there would be another payment to make of £237 to cover interest

paddyrg

Payment holidays are a curse - the interest owed continues compounding, and the effect is usually pretty devastating, especially early on in a contract as your missed payment and interest compound, so your following payments pay more interest and less principal back. That results in a much higher cost of missing a payment than one might think.

For instance - credit card monthly minimums - some cards used to offer a December special payment holiday (£0 minimum for that month) but if you crunched the numbers, it set the account holder back about 11.5 months in terms of how much of their payment was interest and how much principal.

I can't crunch the figures properly for you on this phone, but payment holidays are very bad news in general.