early settlement dispute help wanted!

beeswax31

i took out a loan in june from everyday loans for £5000. interest rate 53.9% apr 69.4%.

ive made 9 monthly payments of £254.01 and paid a lump sum of £5111.99 which they gave me as the settlement figure meaning I've paid £7398.08. i just wanted to check whether this is correct? the figure i got using early settlement calculator was £4639.23. some documents i have say loan term 47 months, others say 48 months.

i understand i was stupid to take out the loan but was a desperate time. they've sent me a breakdown on interest paid, not sure if loans been front loaded and whether this is allowed. anybodies help i would greatly appreciate!

thanks

[Deleted User]

It wasn't front loaded.

The figures seem about right.

beeswax31

thanks - could you tell me how?? do you pay more the first year of the loan?

[Deleted User]

No. In the early stages of a loan, more of you payments go towards interest, as the balance is higher.

Over time, more goes to the capital. After only 9 months, you haven't paid much off the capital.

Nearlyold

The difference will also be due to the 58 days interest charge (approx. £425) for early settlement added to the balance. You've been paying well over £200 per month in interest - around £225 in the first month.

beeswax31

I read somewhere that this is for loans over £8000? Is this inaccurate. Also the term didn!!!8217;t exceed a year but does it mean the term originally is 47/48 months? Thanks for you help

[Deleted User]

Early settlement is for all loans, regardless of amount.

From what you've said, the original term was 48 months.

Nearlyold

beeswax31 wrote: »

I read somewhere that this is for loans over £8000? Is this inaccurate. Also the term didn!!!8217;t exceed a year but does it mean the term originally is 47/48 months? Thanks for you help

If the early/partial settlement payment is over £8,000 the lender can charge a fee (subject to it being justified) in excess of the 58 days interest charge allowed under the early settlement regulations. Its the contractual term remaining that counts in terms of whether a max of 28 days or 58 days interest can be added to the balance.

PeacefulWaters

Interest isn't front loaded. The % rate applied remains constant. The £ rate charged reduces as the balance reduces.

Unfortunately, you've seen the result of this on settlement figures where loans have a very high APR.