Loan Amortisation statement

Arul

jonesMUFCforever wrote: »

Then go back to the banks who lent to you previously.

Off course I have the same feeling , that I shoudl have gone back to my old bank this time as well. But by any chance do you have an iota of idea how HSBC statements work or do they produce an amortisation statement which is my original question?

ViolaLass

Arul wrote: »

Currently my Loan statement from HSBC looks as follows for £15k loan for 5yrs period, the £100 overpayment highlighted in April has not made any difference to the outstanding which includes the interest , as you all say if I made an overpayment there should have been atleast a slight reduction in the balance for the £100 overpayment contribution , but in this case I do not see any benefit of making an overpayment, this is when I wanted to understand the amortisation split, any advise would be of help for me.

Date|| Type || Description ||Paid Out| Paid in |Balance (£)
15 Jun|| CR|| Loan Repayment || ||314.81 || 17529.36 D
14 May|| CR|| Loan Repayment || ||314.81|| 17844.17 D
18 Apr|| BP||Personal Loan || ||100 ||18158.98 D
14 Apr|| CR|| Loan Repayment || ||314.81|| 18258.98 D
16 Mar|| CR|| Loan Repayment|| ||314.82|| 18573.79 D
14 Feb|| DR || Loan Drawdown || 18888.61||

After the £100 overpayment, the amount you owe appears to have gone down by £100 so I don't understand why you're saying that there hasn't been a reduction.

Arul

ViolaLass wrote: »

After the £100 overpayment, the amount you owe appears to have gone down by £100 so I don't understand why you're saying that there hasn't been a reduction.

The Balance showing up includes the interest as well (for 15K loan the balnce shown is 18k which includes interest for the loan drawn) so when I paid £100 as overpayment , i would expect the balance to drop by more than £100 as I shouldn't be paying the interest for £100 for next 5 yrs ( Approx £40 interest)

jonesMUFCforever

Arul wrote: »

The Balance showing up includes the interest as well (for 15K loan the balnce shown is 18k which includes interest for the loan drawn) so when I paid £100 as overpayment , i would expect the balance to drop by more than £100 as I shouldn't be paying the interest for £100 for next 5 yrs ( Approx £40 interest)

You really do not how loans work do you?

ViolaLass

jonesMUFCforever wrote: »

You really do not how loans work do you?

Doesn't he have a point? If the amount showing is the amount that will be repaid if all payments are made according to plan, rather than the amount owed at that point, then overpaying should make the total fall by more than the £100.

Xbigman

It is a fair point that the statement provided by HSBC is very poorly done and does not show much of anything. I suspect its a throwback to the days of front-loaded interest where over repayments were indeed pointless. In reality interest is being saved and an annual statement should show that. If its HSBC's policy not to recalculate the interest then unfortunately that that. The main lesson I've learnt from this is not to get a loan from HSBC!




Darren

jonesMUFCforever

ViolaLass wrote: »

Doesn't he have a point? If the amount showing is the amount that will be repaid if all payments are made according to plan, rather than the amount owed at that point, then overpaying should make the total fall by more than the £100.

£100 overpayment on an £18k loan especially in the early days will save about 40 p per month.

ViolaLass

jonesMUFCforever wrote: »

£100 overpayment on an £18k loan especially in the early days will save about 40 p per month.

No one is claiming that the difference should be huge, just that there should be one.

Arul

ViolaLass wrote: »

Doesn't he have a point? If the amount showing is the amount that will be repaid if all payments are made according to plan, rather than the amount owed at that point, then overpaying should make the total fall by more than the £100.

Xbigman wrote: »

It is a fair point that the statement provided by HSBC is very poorly done and does not show much of anything. I suspect its a throwback to the days of front-loaded interest where over repayments were indeed pointless. In reality interest is being saved and an annual statement should show that. If its HSBC's policy not to recalculate the interest then unfortunately that that. The main lesson I've learnt from this is not to get a loan from HSBC!

Darren

Yes, exactly that’s been my concern so far, that the HSBC Personal Loan statement ( Online) doesn't give the consumers any clue on what's the benefitof Overpayment. Based on your experiences can any of you please advise is the issue worth reporting to Ombudsman ?

1) They are not producing an accurate statement in their online system ,which doesn't helps the end consumers to realise the benefit of an overpayment! Overpayments made at starting of the loan period , significantly reduces the interest than the overpayments made at later stage. I believe thousands ofcustomers will be motivated to make overpayments when they see the fall in their outstanding balances immediately rather than an annual statement.

2) Even if HSBC is not producing an online statement , at least on request of consumers shouldn't they be sharing an accurate outstanding balance, rather than shooing away customers? To be fair, I am even ready to pay for such one off requests or statements that shows the accurate balances, here in this case they keep consumers blindsided which is not a very transparent system!!

3) Why should end consumers be doing the Amortisation statements ? yes off course some have the ability to do it , most do not have the ability to do this, but shouldn't the bank maintain more transparent statement which gives us a clear picture on what goes in and how the money is split across as interest and premiums ? Will that not help consumers to make more informed decisions?

Arul

jonesMUFCforever wrote: »

£100 overpayment on an £18k loan especially in the early days will save about 40 p per month.

As our forum mate VoilaLass says , I am definitely not claiming for a huge difference , I am merely looking to see some difference in the statement which is more than £100. Lets put aside the fact that I have made a small contribution of £100 this time, I made a smaller contribution specifically to understand how the outstanding is affected,and how to make an overpayment in HSBC.

My questions is shouldn't the HSBC bank be more transparent enough to produce all these details accurately rather than asking the consumers to go around trying to find their own calculations?!

I was also surprised on how did you manage to compute the 40P saving per month without knowing the rate of interest I borrowed the loan for? Any details shared will be helpful for others in the forum as well.