Help! Calculating Amigo Daily Interest

MoneyPanda

Hi all, as the title states, I'm trying to calculate the monthly interest for an Amigo loan. Now I have googled the subject to death, looked at the pinned threads on here, but I can't seem to calculate the interest correctly. I'm always £1 to £15 pound off.

My reason for this is to try and get a rough idea what the loan balance will be in a years time and then draw up a plan of action to get this paid off....quickly.

Here is typical month below...

Principle: £7,500
APR: 49.9%
Balance before Interest: £6,389.34
Interest Period: 01/07/18 to 31/07/18
Interest: £223.36
Balance after interest: £6,612.70
Repayment over 60 months.

Now when I try and figure this out myself I get...
Interest: £230.45
Balance after interest: £6,212.22

Now I'm in the same ballpark with the balance but my interest is way off. So my maths is really flawed. So I am hoping there is someone on here much smarter than me who can provide any help or material on how to correctly calculate this. Any help will be greatly appreciated. Many thanks in advance.

foxy-stoat

There are online calculators.

On £7500 @ 49.9% with 60 payments of £341.51 then at month 13 (after you pay the 12th installment) you will owe £7050.

How much is your monthly payment, as on their site if you plug in the numbers then they give you a monthly payment of £296.44 which is £15 less than the first months interest so the loan can never be paid back, unless they work out their interest in a differently to the rest of the world.

I wouldnt worry about what happens in a years time, I would start to overpay the loan NOW, sell everything you have and try and clear some of it.

TrickyDicky101

The APR is not the figure you want to use - you want the periodic interest rate derivable from:

((1+49.9%)^(1/12)-1)*12

=41.17%

Which should get you very close to the quoted interest charge.

MEM62

Spare yourself and your guarantor the burden of an Amigo loan. As your guarantor is liable for the loan anyway, it would be far cheaper for you and less risky for your guarantor to take out a loan in their name at a far lower interest rate and you make the repayments.

foxy-stoat

MEM62 wrote: »

Spare yourself and your guarantor the burden of an Amigo loan. As your guarantor is liable for the loan anyway, it would be far cheaper for you and less risky for your guarantor to take out a loan in their name at a far lower interest rate and you make the repayments.

Looks like they where thinking about an Amigo loan a few months ago and by the looks of it still considering it - which is a good thing as not accepted it.

https://forums.moneysavingexpert.com/discussion/5858321/credit-card-really

Who is the Guarantor going to be? Ask them to take out a loan for you as MEM suggested - money saving at its best !

You will probably lose the friend if/when it all goes wrong but this forum is about money saving - not keeping friends, there maybe another part of the forum for that.

MoneyPanda

Thanks for all your help people. My plan is to start over paying on the loan, but I'm very interested in seeing the bigger picture and seeing what the balance will be in a year's time (maybe 2) and adjusting my over payments to see how quickly I can pay it off.

Spare yourself and your guarantor the burden of an Amigo loan. As your guarantor is liable for the loan anyway, it would be far cheaper for you and less risky for your guarantor to take out a loan in their name at a far lower interest rate and you make the repayments.

Too late. I've already had this loan for the past 2 years and only having just paid of just £1k in over 2 years is a bit of a shocker. Hence my reason to get shot of this as quickly as possible.

Looks like they where thinking about an Amigo loan a few months ago and by the looks of it still considering it - which is a good thing as not accepted it.

I'm looking to get my credit back on track and getting rid of Amigo is just one huge step towards my goal and to stop my credit file being used as target practice.

MEM62

MoneyPanda wrote: »

Too late. I've already had this loan for the past 2 years.

Picture me with head in hands.

Craig1981

try this - I have used this in the past and fairly accurate
https://www.themoneycalculator.com/loans/calculators/loan-overpayment-calculator/#!/dealfinder/loans/

foxy-stoat

MoneyPanda wrote: »

Thanks for all your help people. My plan is to start over paying on the loan, but I'm very interested in seeing the bigger picture and seeing what the balance will be in a year's time (maybe 2) and adjusting my over payments to see how quickly I can pay it off.

I wouldnt worry about what the balance will be, just over pay what you can afford to, with an interest rate of nearly 50% it doesnt matter what the balance will be just get as much money overpaid as possible. I would be selling everything I could and throw money at this loan, down value car, sell the iphone 7 and buy a 5s, cancel phone contract and use pay and go sim, get another job or ask for more shifts, anything.

Craig1981

foxy-stoat wrote: »

I wouldnt worry about what the balance will be, just over pay what you can afford to, with an interest rate of nearly 50% it doesnt matter what the balance will be just get as much money overpaid as possible. I would be selling everything I could and throw money at this loan, down value car, sell the iphone 7 and buy a 5s, cancel phone contract and use pay and go sim, get another job or ask for more shifts, anything.

I think OP wants to see the value in black and white of what an overpayment will do and the amount of interest it will save. some people, like myself, need to see the impact it will have, not just throw everything at it and expect it to be cleared in 12 months.


always good to have a strategy

foxy-stoat

Craig1981 wrote: »

I think OP wants to see the value in black and white of what an overpayment will do and the amount of interest it will save. some people, like myself, need to see the impact it will have, not just throw everything at it and expect it to be cleared in 12 months.


always good to have a strategy

Suppose but the same would of been true just before he took out the loan if that was the case and if the punters actually see payback rate of the 49.9% loan they wouldnt take it out.

There are over payment calculators in any case.