Loan on payment arrangement

pigsmightfly

Hi,

Just wondered if someone could explain something to me please

I have a loan that got put onto a payment plan as I could'nt afford the monthly payments at the time. Since this happened, when I look at the balance of my loan, it is going down by what I pay each month. However there is a note to say the balance shown is not the actual balance of the loan.

My question is, when this balance gets to zero, what happens? I understand that as I am on a payment plan I am technically underpaying each month so start to accrue arrears but what happens to these and why aren't they shown?

Hope this makes sense and if someone can explain it to me I would be grateful. Just starting to plan to pay them off so would like a better idea of where I stand with my total debt really.

Thanks

pigsmightfly

Also, I have this set up on 2 loans, does what happens differ between banks or is there a set thing that happens?

Thanks

happy_bunny_2

Best post this on the debt free wannabe board, they should be able to help

pigsmightfly

happy_bunny wrote: »

Best post this on the debt free wannabe board, they should be able to help

Ok will do, thanks