DMP balance

Movingon5464

Hi, I am on a dmp with Stepchange and am in the process of checking with my creditors that the balances showing on my dmp statements are correct. I am a bit confused when it comes to the 2 loans I have. I don't have the real figures to hand so will have to make up an example.

Original loan for £10,000 over 5 years

Interest total of £2,000 therefore total repayable of £12,000 over 5 years (60 payments at £200)

Entered dmp after 1 year so £2,400 paid (12 x £200)

Would the opening balance on the dmp be £9,600 which is the £10,000 plus the full interest of £2,000 minus the £2,400 paid ?

This would mean the full 5 years interet is repayable under the dmp or should it just be the first years interest as i entered the dmp after 1 year ?

Movingon5464

Has anyone out there had a DMP with a loan included ? Do you know if you paid back the full amount of interest under the DMP ?

HappyMJ

Interest may or not be frozen it's up to the creditor.

Puzzcat

I believe my loan had its interest front loaded and the balance it had reached was what went into the dmp so included interest.

bennyhill_2

I was 3 years in to paying a 5 year loan, and the DMP included the full balance of the loan. Interest was frozen by the creditor, and was never re-established.

I doubt that you'd get a creditor to simply freeze the loan and the interest due after 1 year, after all from what I've seem when you 1st take a loan out the first year is normally spent paying back just the interest, and after this time the payments go towards paying down the actual capital part of the loan.

Movingon5464

Thank you for your responses. I was thinking it was probably correct that i repay all the interest but was hoping I was wrong.

mum2one

My interest was frozen on my loan, - with stepchange x

Movingon5464

I am with Stepchange so will give them a call. When I set up the DMP i was just so relieved to be paying a manageable amount that i didn't question anything else or pay much attention to wether interest was still being charged.

January2015

We have two loans with Hellifax which are in our DMP.

When originally taken out (pre-DMP days), the loans were loaded on the account for the only the amount borrowed. Each month interest was added and our payments slowly (very slowly) reduced the balance owing.

When the loans entered our DMP the balance owing was only the balance showing on the account. Hellifax add the monthly interest each month, but immediately credit a payment to match the monthly interest amount. Therefore, in our case, the only amount we are repaying for our loans is the actual loan amount borrowed. No interest is being added to the debt.