Loan with front-loaded interest

fozmcfc

Whilst I agree with the above, people should know what they are signing up to, surely it would help, if companies all worked the same way.

For instance Cashcow appears to be saying that Tesco show the starting balance as the amount borrowed + the interest.

Natwest show the amount borrowed only as the starting balance, then each month, you get the interest added for that month, on the remaining balance.

I know it works out the same and that the paperwork will show what the total to be paid back is, but IMO, it would avoid confusion if companies worked the same way.

foxy-stoat

fozmcfc wrote: »

Whilst I agree with the above, people should know what they are signing up to, surely it would help, if companies all worked the same way.

For instance Cashcow appears to be saying that Tesco show the starting balance as the amount borrowed + the interest.

Natwest show the amount borrowed only as the starting balance, then each month, you get the interest added for that month, on the remaining balance.

I know it works out the same and that the paperwork will show what the total to be paid back is, but IMO, it would avoid confusion if companies worked the same way.

You are assuming that folk that come on here complaining about high charges or high interest rates actually read the loan agreement before they sign it.