Loan Amortisation statement

Arul

I recently availed a loan from HSBC, I requested them to provide me an amortisation statement to understand the interest and premium splits to plan my overpayments...but to my frustration they deny providing me an amortisation statement...are they not supposed to be providing this legally to maintain transparency so that consumers can make calculated decisions ? Is it the same case with every other banks?

Gaz83

How do you mean 'they deny' you? Are they saying "no, we will not provide you with an amortisation statement"?

jonesMUFCforever

The CCA provides you with this information.
How will they know how much you will overpay and when?

Nearlyold

Just Google Amortisation table and put your loan details in - simples

nyermen

I'm not sure they have to provide the breakdown of the payments, formulas etc. That said, depending on the loan (is it a fixed rate / payment one), it can be worked out roughly using the calculators mentioned.
You can get pretty close - I've not been able to exactly reproduce their formula on my loan, despite trying - i was about £12 out on a 20k 4 year loan. It'll be something minor I'm missing (Interest accrual or day / divisor basis etc). The loan agreement will have the details of things like EIR and Simple interest rate (and that they do have to provide on request of course), after which most calculators can help.

Remember that they may (for mine they do):
1) Give you a balance that includes precomputed interest (meaning that if you make prepayments, the balance needs recalculating to take into account altered interest amounts)
2) Use "Continuously compounding interest";
3) Calculate interest differently if the payment date is due on a sunday and therefore not received until monday).
4) If you have an HSBC advance account, they refund 10% of the interest at maturity. Not sure of the precise rules behind this (Must not prepay in full? etc).

In any case good luck

Peter

Arul

jonesMUFCforever wrote: »

The CCA provides you with this information.
How will they know how much you will overpay and when?

Even without an overpayment , what is agreed is to pay the £314 for 60 months, can they not provide a split of interest and premium for 60 months, as an end consumer I was even able to closely replicate the split for 60 months , but when it comes to overpayments I am not able to understand how will their calculation work, as I recently made a small overpayment I was interested to understand the split, but they are denying to provide this statement....worst of all the overpayment did not reduce any interest or tenure, so I am totally confused weather to make any further overpayments at all...

Arul

Nearlyold wrote: »

Just Google Amortisation table and put your loan details in - simples

Yes , I was able to closely replicate the statement using the default amortisation template provided in excel, but the problem is when I make overpayment in HSBC the overall payment including the interest has not reduced a bit, that's when I wanted to understand the amortisation split but the bank denies to provide one. They trying to keep me in the blind, that's very weird and frustrating .

Arul

Gaz83 wrote: »

How do you mean 'they deny' you? Are they saying "no, we will not provide you with an amortisation statement"?

Yes Gaz83, they are saying they can't provide amortisation statement...I even asked them at least if they can provide an approximate estimation on what would be my savings for the overpayment I have made recently, they keep saying they will not be able to provide this estimation as well. They say they will be able to calculate all this only when I close the loan.

Arul

nyermen wrote: »

I'm not sure they have to provide the breakdown of the payments, formulas etc. That said, depending on the loan (is it a fixed rate / payment one), it can be worked out roughly using the calculators mentioned.
You can get pretty close - I've not been able to exactly reproduce their formula on my loan, despite trying - i was about £12 out on a 20k 4 year loan. It'll be something minor I'm missing (Interest accrual or day / divisor basis etc). The loan agreement will have the details of things like EIR and Simple interest rate (and that they do have to provide on request of course), after which most calculators can help.

Remember that they may (for mine they do):
1) Give you a balance that includes precomputed interest (meaning that if you make prepayments, the balance needs recalculating to take into account altered interest amounts)
2) Use "Continuously compounding interest";
3) Calculate interest differently if the payment date is due on a sunday and therefore not received until monday).
4) If you have an HSBC advance account, they refund 10% of the interest at maturity. Not sure of the precise rules behind this (Must not prepay in full? etc).

In any case good luck

Peter

I did replicate the amortisation split using Excel template , but I was off by approx £200, but seems like you are lucky to get revision in balance, for me even when I make repayment they are not revising my overall balance payments, I am being told I should make payments of £18k including the interest for £15k loan and they would recompute only at the end if I would get any interest rebates because of overpayment... thats absolutely weird response I am getting and I am wondering if I should make any overpayment at all as I do not understand if it is any profitable to make overpayments.

jonesMUFCforever

Is it wise to borrow at all if you do not understand the product - you borrow you pay interest - if you overpay then you pay less interest overall - why crucify yourself over all this?
Live life to the full.

Next time save up it will save yourself a packet.

Nearlyold

*If you make an overpayment it will either reduce the term or reduce the monthly payment, either way from the point onwards when you make your overpayment you will save interest because you owe less. There is no magic mathematical point at which its better to make an overpayment, the earlier you make an overpayment the more interest you will save, as I said before - simples.


*This is on the assumption you have taken a consumer loan governed by the European Consumer Credit Directive