118118 settlement calculations?

ThePants999

Your balance shouldn't go above the amount borrowed if you've been on a payment plan that's designed to actually repay the loan, and you haven't missed any payments!

[Deleted User]

It hasn't.

abcdef1234

Thanks for your responses again. It really is bugging me. After further looking into the matter I would just like to show you something else I noticed. I have 2 loans at the moment and they are with high interest companies for obvious reasons.

I have a loan with 118money for £3000. Immediately my balance on my account went to 5600 and my payments off 233 are reduced off that figure each month. Credit report shows 5600 loan with my balance now at 4200 (6 months payments).

I have a loan with Avant for 3500. My balance stayed 3500 and my balance is reduced by my (payment minus interest) and my loan balance has only ever went above the amount originally borrowed when the first months interest was added. Which is how I thought loans work.

I really think that 118 are acting like crooks at the moment.

My question:

How can my credit report show that I owe 118money 5600 pounds when I took out a loan for 3000.

My Avant loan shows less than originally borrowed amount already I might add.

Thanks for your time again.

PeacefulWaters

abcdef1234 wrote: »

Thanks for your responses again. It really is bugging me. After further looking into the matter I would just like to show you something else I noticed. I have 2 loans at the moment and they are with high interest companies for obvious reasons.

I have a loan with 118money for £3000. Immediately my balance on my account went to 5600 and my payments off 233 are reduced off that figure each month. Credit report shows 5600 loan with my balance now at 4200 (6 months payments).

I have a loan with Avant for 3500. My balance stayed 3500 and my balance is reduced by my (payment minus interest) and my loan balance has only ever went above the amount originally borrowed when the first months interest was added. Which is how I thought loans work.

I really think that 118 are acting like crooks at the moment.

My question:

How can my credit report show that I owe 118money 5600 pounds when I took out a loan for 3000.

My Avant loan shows less than originally borrowed amount already I might add.

Thanks for your time again.

There are various ways of accounting for loans and both ways you describe in the quoted post are correct.

As long as you're settlement figure is quoted correctly there isn't a problem.

tonyh66

its interesting the 118 loan jumped to 5600 immediately, because that says they have front loaded the loan with 87% interest on the 3000. Is there any fees involved? how do they say they calculate the interest? daily? monthly? yearly?
They have lumped over a years interest onto the loan at the start.

Gaz83

tonyh66 wrote: »

its interesting the 118 loan jumped to 5600 immediately, because that says they have front loaded the loan with 87% interest on the 3000. Is there any fees involved? how do they say they calculate the interest? daily? monthly? yearly?
They have lumped over a years interest onto the loan at the start.

The loan isn't front loaded. The balance of £5,600 would show as it's the total amount to be repaid if the loan was repaid exactly as the agreement.

The settlement figure will be lower than that and will include an interest rebate if paid early.

Loans aren't front loaded.

tonyh66

Gaz83 wrote: »

The loan isn't front loaded. The balance of £5,600 would show as it's the total amount to be repaid if the loan was repaid exactly as the agreement.

The settlement figure will be lower than that and will include an interest rebate if paid early.

Loans aren't front loaded.

your right, i had a blonde moment the 5600 will be the total paid over the term

abcdef1234

I have worked that out now.

Avant show you your live/actual balance where 118 show your balance with 2 years interest already added and give you a rebate if you pay it off early.

Still shocked that Ihave only paid 40 pounds out of my 1400. Wonder what the APR would be on that. haha

I'll leave it alone now, thanks for your time.

[Deleted User]

abcdef1234 wrote: »

still shocked that ihave only paid 40 pounds out of my 1400. Wonder what the apr would be on that. Haha

71.31%. .

Ben8282

I also initially believed that the interest had been front loaded but that is not the case.
The problem is the very high interest rate.
I have made approximate calculations and I am very sorry to say that the amount that you are being asked for to settle this loan agrees very approximately with my own calculation.
You have had the money for at least 6 months and I believe the early repayment penalty is 56 days interest, say 2 months.
VERY APPROXIMATE CALCULATION
£3000 at 71.73% pa for 1 year would be £2151.90 or £1434.60 for 8 months. You have made repayments totalling £1400.40. Therefore the amount repayable is £3034.20. In view of the approximate nature of the above calculation, this compares well with the £2958.89 that they have asked you topay.