My Credit Early Settlement amount seems way too high - can anyone advise me please!!

Frostb1te

Hello,

About 18 months ago I purchased a bed from Dreams and took advantage of the 12 months interest free credit, which formed part of a credit agreement to start over a subsequent four years (after the 12 months). I was not expecting that I would need to use the credit agreement, as I had intended simply to settle in full either just before the 12 month holiday finished or at worst a couple of months into the agreement. The bed, admittedly an expensive one at just over £4,000 (big mattress, pop-up TV etc.) is great, but the settlement from Creation finance has come through at a wopping £5,045. I have already paid five installments totalling just over a £1,000, so my cost of money/early settlement charge just 5 months into the agreement has amounted to nearly £2,000. This seems staggeringly high. I have a read a little on early settlements that calculations need to be fair, but this one amounts to nearly half the cost of the bed. Can anyone help, advise etc? Thanks, David

opinions4u

1) What's the APR?

2) If you don't settle within the interest free period, the interesting charging period is almost certainly backdated to when you took the loan out - not from that date the interest free period expired.

CH27

Check your T&Cs but i'm sure they still charge you the full interest.

That's how they can justify offering you 12 mths interest free.

Dabooka

I think the guys above are bang on the button, it's fairly standard with these deals that the interest is backdated to the day you signed.

CHR15

The whole business model of these agreements is built upon the customers failure to repay on time.

A nano second late in paying before the end of the 0% zone costs dearly.

Frostb1te

Thanks all who have replied......My APR is something ludicrous like 28%. I didn't receive any pre-contract illustrations at the time I ordered the bed or signed up .....David

Common_Sense_2

Frostb1te wrote: »

Thanks all who have replied......My APR is something ludicrous like 28%. I didn't receive any pre-contract illustrations at the time I ordered the bed or signed up .....David

The agreement documents you signed will have had details on early settlement figures. also look closer at the terms and conditions

CLAPTON

well

at the end of the first year they will add the interest i.e. 4000 x 28% so you when owed 5,120; this is because the first year isn't interest free unless you pay in full before the 12 months is up

each month you are paying about 100 in interest so the capital amount won't fall by much initially
5,045 seems a little high (I would expect nearer 5,000) but without the full details it's impossible to say