Redemption Figure

Stevej1316

Hi All,

Please could I ask for some help?

In Jan 2015 - I took out a secured loan for £45k + £2.5k - broker fee (Total £47.5k)
I have been paying a monthly amount of £426 - which totals £7,242.
I have just received a redemption figure of £47.5k

I have no arrears and no further borrowing

I have queried this as taking into account payments already made - Prestige Finance require £14,454 to pay off the loan - to me this seems excessive (15%)

Any help would greatly be appreciated.

Gaz83

What was the interest rate, and the term on the loan?

What do you mean by "Prestige Finance require £14,454 to pay off the loan"?

[Deleted User]

What's the settlement? 47k or 15k?

Without knowing the term or the rate, I'd guess it will be in the high 40s, as you'll have paid off very little capital in 12 months.

Stevej1316

Sorry if I was unclear (I'll blame the sunshine!)- the loan was for £45k plus £2.5k broker fee.
The £15k was calculated by adding the £7.5k already paid (18x426) plus the difference from the £40k (remained after paying the £7.5k) and the £47k redemption figure.
I know I am working it out wrong probably but thought my payments accounted for something. The term was 264 months @10.62 variable APR and interest @9.40%.

It has however fulfilled its purpose and with paying all my credit off can now get a mortgage at a high street bank with very reasonable rates.

Thanks for all your help.

[Deleted User]

Your payments do count for something, but obviously at the start of the loan, you owe a very large sum, so the interest charged is higher. The vast majority of your payments therefore go to the interest.

As the capital starts to go down, more of your payments go to the capital. Over that kind of term, you wouldn't expect to make any kind of a dent in the capital after just a year.

PeacefulWaters

Your monthly payment barely scratches the interest each month, so it won't be a million miles out and probably includes your next payment.

£47,500 borrowed.
10.6% interest = £400 a month give or take.
£426 monthly payment means the debt is dropping by c£26 a month.

Caz3121

Stevej1316 wrote: »

The £15k was calculated by adding the £7.5k already paid (18x426)

If you use the guardian loan calculator and enter 47,500 over 264 months @ 9.4% you will see your £426 per month payments and can see that after 18 payments you will have paid £1,046 off the loan together with £6,630 interest. On such a long loan the payments will be largely interest in the first years...it will be month 177 before the payment is 50% to the loan and 50% interest and after than there will be more off the debt than interest
If the loan continues to the end, you will pay over £112.5k back

foxy-stoat

So take the £40,000 cash you have and make a lump sum payment and continue paying the £426 until the loan is clear.

Thats the only way you can reduce the interest you are going to pay.

Stevej1316

Thanks for all your help everyone