We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Personal Loan Outstanding Balance
Afternoon,
I never thought much of the fact that HSBC shows my personal loan as the gross amount that will be paid over the life the loan, but as the credit report site indicates there is £15,000 barrier that can affect my credit rating, I am left wondering why my outstanding principal is not the amount shown as owed as would be the case for a mortgage. There is no prepayment penalty on my loan, and from a financial reporting perspective, the bank would not be able to report their asset as the contractual lifetime cash flows. Given the additional debt represented affects credit scores adversely depending on total unsecured debt levels, why is it appropriate for my bank to indicate the lifetime cash flows as my debt when I could prepay a smaller balance to pay off my loan in full?
Thanks for any insight.
I never thought much of the fact that HSBC shows my personal loan as the gross amount that will be paid over the life the loan, but as the credit report site indicates there is £15,000 barrier that can affect my credit rating, I am left wondering why my outstanding principal is not the amount shown as owed as would be the case for a mortgage. There is no prepayment penalty on my loan, and from a financial reporting perspective, the bank would not be able to report their asset as the contractual lifetime cash flows. Given the additional debt represented affects credit scores adversely depending on total unsecured debt levels, why is it appropriate for my bank to indicate the lifetime cash flows as my debt when I could prepay a smaller balance to pay off my loan in full?
Thanks for any insight.
0
Comments
-
Because the only thing that is set in stone is written on the loan agreement you signed. They do not have a crystal ball so do not know if, when or by how much you may overpay by.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 353.6K Banking & Borrowing
- 254.2K Reduce Debt & Boost Income
- 455.1K Spending & Discounts
- 246.7K Work, Benefits & Business
- 603.1K Mortgages, Homes & Bills
- 178.1K Life & Family
- 260.7K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards