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Is Interest Chargable On Pre98 Loans if Income Thresh Hold is Never achieved?
ErnieBecclestone
Posts: 6 Forumite
Hi,
was just watching Martin's programme tonight and i was wondering if i heard him correctly?
'On Mortgage style loans Pre98 if you have not or are unlikely to achieve the Income Thresh hold then do not worry about the 3.3% interest rate'
Do i therefore interp this as - interest is only charged on the loans once repayments begin and the loans remain static uptown this point. IE: If i had taken £3.4k on loans 92-95 then the amount remains at £3.4k until i reach the income thresh hold and they then begin charging the 3.3% as highlighted on tonights programme?
was just watching Martin's programme tonight and i was wondering if i heard him correctly?
'On Mortgage style loans Pre98 if you have not or are unlikely to achieve the Income Thresh hold then do not worry about the 3.3% interest rate'
Do i therefore interp this as - interest is only charged on the loans once repayments begin and the loans remain static uptown this point. IE: If i had taken £3.4k on loans 92-95 then the amount remains at £3.4k until i reach the income thresh hold and they then begin charging the 3.3% as highlighted on tonights programme?
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Comments
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ErnieBecclestone wrote: »Hi,
was just watching Martin's programme tonight and i was wondering if i heard him correctly?
'On Mortgage style loans Pre98 if you have not or are unlikely to achieve the Income Thresh hold then do not worry about the 3.3% interest rate'
Do i therefore interp this as - interest is only charged on the loans once repayments begin and the loans remain static uptown this point. IE: If i had taken £3.4k on loans 92-95 then the amount remains at £3.4k until i reach the income thresh hold and they then begin charging the 3.3% as highlighted on tonights programme?
No. On the pre-98 loans, interest is charged at the previous March RPI rate (currently 3.3%) from the moment you take out the loan until either it is wiped or paid off.
What Martin was saying is that the interest rate is irrelevant if you never reach the income threshold for repaying as you don't pay it!0 -
Ok thanks, i thought it was too good to be true.0
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ErnieBecclestone wrote: »Ok thanks, i thought it was too good to be true.
What it means is that, in current terms, your loan will never be more than you borrowed. No interest would mean that it gets smaller every year!0
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