NRAM - Error in interest charges being applied to my unsecured loan account

gavman99

I have noticed what appears to be an error in the amount of interest I've been charged on my unsecured loan with NRAM. This has nothing to do with the recent CCA statements issue.

My APR with them is 9.79%. My current balance is £15,170.65 with 183 monthly payments remaining.

I pay them £163.35 per month, yet according to various online calculators (who bring back subtly different results), I should be paying back approx £160 per month.

What I don't understand is how NRAM can have me paying between£2 & £4 per month more than this ??

As unlikely as it is that such a basic mistake has been made, to me this monthly payment (which will surely be based on a standard formula) cannot be wrong. It is not open to interpretation other than possible rounding differences, but surely not to the extent of more than £3 per month (works out at approx an extra 2% of what I think I should be paying)

Can anyone else do a quick check on their monthly payments using an on-line calculator to verify if this is just me ?

Are there guidelines about rounding when they work out these calculations ? i.e. they are allowed to round at 2/3/4/5/6/7 decimal places ???

If it turns out they have been over-charging me, what options do I have in terms of redress ?

Is it just a case of a refund/balance adjustment, or does this fall into the similar CCA statements issue whereby as their statements were inaccurate, the interest charges cannot be legally enforced (wishful thinking I know !!)

Thanks,
Gav.

gavman99

£159.92 according to this calculator.............
http://www.efunda.com/formulae/finance/apr_calculator.cfm

£159.91 according to this calculator............
http://money.guardian.co.uk/calculator/form/0,,603119,00.html

£159 according to this calculator................
http://www.moneysavingexpert.com/loans/cheap-personal-loans#calc

So why do NRAM say my monthly payment is £163.35 ???

DevCoder

If it is an error then it will just be an adjustment, it will certainly not fall under the "legallycharged" criteria

Normally a difference is highlighted/ecause of the time between having use of fund until first payment. You are charged interest from the day funds are paid into your account.

antrobus

What was the amount of the original advance? What was the original loan term?

gavman99

krisdorey wrote: »

If it is an error then it will just be an adjustment, it will certainly not fall under the "legallycharged" criteria

Normally a difference is highlighted/ecause of the time between having use of fund until first payment. You are charged interest from the day funds are paid into your account.

I get that, but what I'm saying is that £15,170.65 is my current balance. So if I went to another loan provider and asked to borrow £15,170.65 over 183 months and they offered me a rate of 9.79%, then I'd be paying back just over £159 per month.

If the rate was 10.19%, then it would work out at £163.35 per month which is what I actually pay. But thats not my rate. My rate is 0.4% less than that.

gavman99

antrobus wrote: »

What was the amount of the original advance? What was the original loan term?

I'll get that info later once I get home and check my original paperwork.

gavman99

Following some serious number crunching, I'm definitely being overcharged. It seems that its been happening since day one on both the secured and unsecured elements of my together mortgage to the tune of £150 to £200 per year.

Time for another complaint to NRAM me thinks !

craaaigo

You've said that your APR is 9.79% but the APR is different to your interest rate. An APR is an overall representative cost of credit which takes into consideration factors such as fees and charges.I'm not sure if you've stated APR as a slip of the tongue and you did mean the interest rate though. Can you clarify please?

gavman99

Sorry I meant interest rate, not APR. Take the example below.......

Statement Period 01/11/2010 to 28/02/2011

Opening Balance £170,247.07

01/11/2010 Payment £1,269.00
01/12/2010 Payment £1,269.00
04/01/2011 Payment £1,269.00
01/02/2011 Payment £1,269.00

Interest Charges for statement period £3,192.19

Closing Balance £168,363,26

Annual interest rate for this statement period is 5.69% meaning a daily rate of 0.015589%. Interest method on my account is Daily Rest.

Interest for period 01/11 to 30/11 is 30 days at £26.342061 = £790.26183
Interest for period 01/12 to 03/01 is 34 days at £26.144236 = £888.90402
Interest for period 04/01 to 31/01 is 28 days at £25.946411 = £726.4995
Interest for period 01/02 to 28/02 is 28 days at £25.748586 = £720.9604

Total interest charges should be £3,126.63, not £3,192.19. Thats an overcharge of £65.56 and that only covers one 4 month period.

Or am I doing something completely wrong here ???

craaaigo

Its difficult to know for sure without details of the term, and i'm not sure why the rate and outstanding amounts are different to your first post... But if you are working out interest payments due only is it not possible that the excess you are paying is the capital that you are actually paying off the loan?

gavman99

Sorry for the confusion. The thread started with details of my current arrangement with NRAM which is an unsecured loan only as my secured part has been settled in full.

But the example above is from a period when I still had my secured loan. The details in that example only refer to the secured part of the account, not the unsecured. Just ignore the earlier posts.

My point is that I appear to have been overcharged on the interest for that single statement period. There are other statement periods where I have been overcharged, and also a couple where I have been undercharged.

The term of the loan is surely irrelevant here ? Stating the obvious here, but surely the interest covers exactly that, interest charges only. The capital is reduced by an amount equal to what I pay to them minus what I get charged in interest.

In the example above, I paid them £5,076.00 and I got charged £3,192.19 in interest, meaning over that 4 month statement period, my capital was reduced by £1,883.81, not the £1,949.37 that I think it should have been (if you add on the £65.56 interest I was charged that I shouldn't have)