Help with interest please

oaktree500

I'm now at the tail end of my debt issues, having managed to get a small loan late last year. It's affordable and chipping away nicely. The only issue is, I'm not 100% on APR / interest and that sort of thing.

From what I can see on my documentation from them:

APR = 44.3% (Not the worst APR, but the lowest I could get at the time)
Loan Interest = 38.39% (I presume this is monthly?)
Payed off in 2021

My understanding is that APR is annual, where as there is a further interest charge noted, which I'm presuming is monthly?

The amount it self was for 5564.95 from Lendable, and I while I am able to afford the payments ok, I was wondering if anybody could help me out with understand of the interest rates/what is charged when and overall what would the best "procedure" to pay off quicker.

For example: I have no charges for paying off sooner, and from the look of the breakdown they give me per month I pay more interest than actual amount on the loan, so would paying a further amount greatly reduce the time I'm paying this for? (As this would be extra money taking away from what is currently being charged interest on, if that makes any sens)?

I am aware generally paying more is the best idea, but I wanted to run it past others who have done the same: IE is it worth doing or just let it chip away like I am now?

I have also seen that if you pay off the loan in full, you may be entitled to a reimbursement of some kind? (as mentioned in the documentation) Does anybody know roughly what that is/how that works?

Apologies for being super dense on this stuff, I've still fairly new to all this stuff, and have been working on getting my overall monthly payments (for everything; bills/rent/debts) to a reasonable point, and then have been working on my CC's which are both on low amounts and in check now.

any help would be greatly appreciated. :beer:

oaktree500

Any body out there able to help me on this?

sourcrates

Moved to loans board.

kezzygirl

The reimbursement is more than likely for the interest you have paid. At rates like that, I would be paying it off as soon as possible.

TrickyDicky101

I disagree with the calculation of the nominal rate (38.39%) from an APR of 44.3% but the difference is not large.

Assuming monthly repayments then each month you will suffer interest on your outstanding balance of:

O/S Balance * 38.39%/12

If you repay early then, and depending on the loan terms you agreed to when you took the loan, the lender could charge up to 58 days' interest in addition to whatever your outstanding capital balance is at the time.

The rebate you refer to is essentially the interest you won't have to pay on the loan since you have now paid it back if you early settle.

foxy-stoat

How much was the original loan, your monthly payments and term.

If you over pay you WILL save on the interest, you should do that ASAP - can you get a credit card with money transfer option?

Exodi

TrickyDicky101 wrote: »

If you repay early then, and depending on the loan terms you agreed to when you took the loan, the lender could charge up to 58 days' interest in addition to whatever your outstanding capital balance is at the time.

Since you sound knowledgeable;

What would stop someone paying off the full balance except a negligible amount (£1) and paying that off normally? Surely that would save you up to two full months of interest balance? Is that a thing? Or perhaps then settling the remaining £1 straight after, wouldn't the 58 day's interest only apply to last balance before settling or I'd imagine there's some time period? It seems too obvious to work like that...

BakingC

Exodi wrote: »

Since you sound knowledgeable;

What would stop someone paying off the full balance except a negligible amount (£1) and paying that off normally? Surely that would save you up to two full months of interest balance? Is that a thing? Or perhaps then settling the remaining £1 straight after, wouldn't the 58 day's interest only apply to last balance before settling or I'd imagine there's some time period? It seems too obvious to work like that...

The additional 2 months would be charged on the extra payment amount. Think you have misunderstood when the interest would be charged. It does not only apply when settling the loan in full but also any additional payment above the contractual amount to reduce the amount owed (unless specified by T&C)

Exodi

BakingC wrote: »

The additional 2 months would be charged on the extra payment amount. Think you have misunderstood when the interest would be charged. It does not only apply when settling the loan in full but also any additional payment above the contractual amount to reduce the amount owed (unless specified by T&C)

Thanks, thought it seemed to obvious to be allowed.

DannyPearce90

No way out of that one!

fwor

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