Loan Agreement

bert2229

Hi can anyone give me some info as to the loan agreement I have , I recently checked my agreement and found that my agreement had the Brokers fee added on to it increasing the loan amount I had asked for , just wondering if this is correct.

[Deleted User]

Sounds right, if you didn't pay it separately.

bert2229

Hi its just that I read that this was not allowed as it breached the consumer credit laws..

tomtontom

You might be thinking of front loaded interest? This is something different.

It's quite normal to add fees to a loan or mortgage. You can pay the fee upfront (or at any time during the loan) if you wish to.

bert2229

Hi I think my loan was front loaded...
They charged me interest upfront on my loan and then added the Brokers fee on to the interest that had been already added up front, and then added to my loan amount, this was my initial enquiry, sorry that I did not provide all the details.

Nearlyold

bert2229 wrote: »

Hi I think my loan was front loaded...
They charged me interest upfront on my loan and then added the Brokers fee on to the interest that had been already added up front, and then added to my loan amount, this was my initial enquiry, sorry that I did not provide all the details.

If this is a consumer loan the interest will not be front loaded. The agreement will show the total amount of interest you will pay for the term of the loan as this is a regulatory requirement, it does not mean you have already been charged this interest. Typically the figures will look something like this.

Amount of Credit £10,000
Interest £4,980
Total amount payable £14,980
60 Monthly payments of £249.67.

There should be a section in the agreement that gives early settlement examples and you will see from those that you get a rebate of interest if you settle the loan early. You would not get a rebate of interest if the loan really had "front loaded interest".

bert2229

Hi yes it is like your example above, the only difference was that they also added the broker fee on to the interest example above and then called it total charge for credit.

Amount of Credit £10,000
Broker Fee £500.00
Interest Charge £4,980
Total Charge for Credit £5480.00
Total amount payable £15,480
60 Monthly payments of £258.00

[Deleted User]

That's all fine and legal. You have nothing to worry about.

jonesMUFCforever

I suspect OP was hoping for a loophole to get money back.

ViolaLass

If you don't want the fee added to the loan, pay it now.

bert2229

This all happened a few years back,.