Can someone explain APR

krailton

I took a loan out for £7000 for a car and have paid back so far £10,700 and still owe £4000 ...it said my annual APR is 33% ...but looking at it it seems I will be paying back 100%
£7000 actual amount and £7000 interest, is this correct or can someone explain to me please .

Thank you

YorkshireBoy

5 years, and monthly payments of c. £240?

Please confirm.

TadleyBaggie

A 5 year loan I suspect? So every year you would roughly add 33% of the outstanding balance as interest.

krailton

It's was 4 years at £252.57

TadleyBaggie

48 x £252.57 = £12,123.36. So just over £5000 in interest, not £7000.

Caz3121

krailton wrote: »

I took a loan out for £7000 for a car and have paid back so far £10,700 and still owe £4000 ...it said my annual APR is 33% ...but looking at it it seems I will be paying back 100%
£7000 actual amount and £7000 interest, is this correct or can someone explain to me please .

Thank you

krailton wrote: »

It's was 4 years at £252.57

A 4 year loan at 33% APR would cost £264.39
If you are paying £252.57 per month and have paid back £10,700 this implies you have made 42 payments so would have 6 payments left to make so £1,515 remaining
have you missed payments? is there anything else on top such as PPI?

robber2

krailton wrote: »

I took a loan out for £7000 for a car and have paid back so far £10,700 and still owe £4000 ...it said my annual APR is 33% ...but looking at it it seems I will be paying back 100%
£7000 actual amount and £7000 interest, is this correct or can someone explain to me please .

Thank you

Seems to me that the bit that you need help with in understanding APR is the 'A', this stands for ANNUAL which means that in very broad terms the amount of interest charged in the example given is 33% PER YEAR. As the loan is clearly for more than 1 year the total interest payable will be (much) more than 33%.

Hope this helps

Rob

Pixie5740

Indeed Annual puts the A in APR and the interest is compound.

iolanthe07

33% APR for a car, which will depreciate rapidly? That is nothing short of outrageous usury.

TrickyDicky101

iolanthe07 wrote: »

33% APR for a car, which will depreciate rapidly? That is nothing short of outrageous usury.

I'd go for financial naivety myself.

krailton

I have missed 3 payments which is the last 3, and have asked them if I can reduce the payments and they said no so they are taking me to court.
They want the remainder of the money which includes 3 missed payments, £4,100 which is definitely a total of 14,700 repayable over the 4 years.
Yes I think I was really naive when I took this loan out as I thought the interest of 33% on the £7,000
I borrowed