APR on Flexible loan

Simongo1

CLAPTON wrote: »

facts and figures always make it easier

whats the sale price of the windows £6,959
whats the discount for taking their finance £900
how much are you borrowing? £6,000 (I gave a £59 Deposit)
how long do you expect it to take to pay it off

A few months.

The monthly repayment quoted was £131.31.
Over 96 months I would repay £12.605.76 (ouch)
To clear it in 36 months I would pay £227.53 per month and the total cost would be £8,191.08 which is still too high for me.

I am going to make an immediate payment of £4,000 which I have confirmed I can do, leaving a balance of £2,000.
I intend on making the payment of £131.31 for 4 months which will reduce my balance to approx £1,607.57 (1.79% added on the balance each month)
Then I will look to settle it in the fifth month by making an overpayment of £1,400 and asking for the settlement figure on approx £207 which will come to around £7.50

Total cost = £6,234.64
(£4,000 + (4 x £131.31) + £1,400 + £207 + £7.50 + £95 Document Fee)

I imagine they hate customers like me but make there money on those customers that do let it run for a number of years and pay a lot of interest as a result.

I am doing work on other parts of the house so a lot of my cash is being spent on that. I envisgage being able to settle after 4 months but if I can't the total cost is still going to be low.

Simongo1

jamesperrett wrote: »

I would strongly suggest that you give a few local companies a try before going for one of the big national companies. They're often much more competitive.

James.

Thanks James
I used a local company on my last house that had been trading for a number of years.
I got the windows fitted around 2005 and by 2009 I was having problems with a few of them - A Couple of windows wouldn't open, some had mist between the panes.
Unfortunately the company were no longer in existance which apparantly happens quite a lot in the double glazing industry. I ended up having to pay for some of the windows to be replaced before I could sell the property.
I know the price I'm going to pay will be higher than a local company but at least I know the quality of th ewindows will be good and the gaurantee will look after me should anything happen.

ILW

You do realise that any payments made in the early part of the agreement will go nearly all towards interest and barely touch the capital you owe.

Simongo1

ILW wrote: »

You do realise that any payments made in the early part of the agreement will go nearly all towards interest and barely touch the capital you owe.

The interest is only added onto the balance each month. Therefore if I reduce the balance by making a large overpayment, interest will only be added onto the remaining balance.

If I didn't make an overpayment then yes you are correct.

Eg Opening Balance £6,000 + 1.79% = £6,107.40
Minus Monthly Repayment of £131.31
Balance at the end of month one = £5,976.04

What I plan to do however is this
Opening Balance £6,000 - £4,000 = £2,000 + 1.79% = £2035.80
Minus Monthly Repayment of £131.31
Balance at the end of month one = £1,904.49