HP Loan Query

yoshiyella

Hello All,

I'm writing on behalf of my friend who last year took out a HP and has regretted it since and wanted me to try and sort it out for him.

I have been trying to work out his settlement figure using the loan repayment calculator through The Guardian with the details on his agreement but they don't appear to tally up!

The amount of credit is £7710
48 payments of £259.14
APR is 29.10%
An option to pay fee of £10

(It also states Rate of Interest per annum is 15.00% and then on next page it states The rate of interest charged is calculated at 15.30% per annum and is applied on the date this agreement is signed. the interest rate is fixed for the duration of the agreement)

Interest payable £4718.72

Can anyone help explain the discrepancies

Thanks

antrobus

yoshiyella wrote: »

...(It also states Rate of Interest per annum is 15.00% and then on next page it states The rate of interest charged is calculated at 15.30% per annum and is applied on the date this agreement is signed. the interest rate is fixed for the duration of the agreement)

Interest payable £4718.72...

£4,718.72 is 15% of £7,710 for four years.

And generally speaking if you want to convert a flat rate of interest to APR, you double it and knock off a bit, so a 29% APR looks about right.

Can't see any discrepancies myself.

Nearlyold

You need to put 29% into the Guardian loan calculator not 15% as the interest rate. The Guardian loan calculator is not designed to work with Flat rates.

yoshiyella

Nearlyold wrote: »

You need to put 29% into the Guardian loan calculator not 15% as the interest rate. The Guardian loan calculator is not designed to work with Flat rates.

I have done so! And that is where the discrepancies lie! I just have to assume that Guardian loan calculator is incorrect!

Nearlyold

What is the discrepancy? Were there any arrangements fees these are factored in to the APR

yoshiyella

Nearlyold wrote: »

What is the discrepancy? Were there any arrangements fees these are factored in to the APR

No arrangement fees - what I listed above is straight from his agreement.

Well the APR according to the Guardian is 25.81% and he was told and the paperwork shows 29.10%.

I'm just trying to get all figures right before I contact them on his behalf.

Basically I am trying to work out how much he needs to pay to get to the half way point so that he can hand back the vehicle.

~Brock~

yoshiyella wrote: »

Basically I am trying to work out how much he needs to pay to get to the half way point so that he can hand back the vehicle.

You shouldn't need to work that out. It should already be stated on the agreement.

antrobus

yoshiyella wrote: »

...Well the APR according to the Guardian is 25.81% and he was told and the paperwork shows 29.10%....

The APR is 29.10% according to this site.

http://money-saving-calculators.prudentminds.com/apr-calculator.html

yoshiyella wrote: »

....Basically I am trying to work out how much he needs to pay to get to the half way point so that he can hand back the vehicle.

That's based on the total amount payable on the HP deal. At a guess, he will have reached the half way point after the 25th payment.:)

National_Debtline

yoshiyella wrote: »

No arrangement fees - what I listed above is straight from his agreement.

Well the APR according to the Guardian is 25.81% and he was told and the paperwork shows 29.10%.

I'm just trying to get all figures right before I contact them on his behalf.

Basically I am trying to work out how much he needs to pay to get to the half way point so that he can hand back the vehicle.

Hi yoshiyella


It's worth remembering that he is entitled to voluntarily terminate and return the car at any time, whether he has repaid 50% or not. The lender can work out whether he is short of this threshold after recovering the vehicle, and then bill him accordingly.


Dennis
@natdebtline