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Advice needed
Ok so I had this payday loan for £500 I’ve paid back just under the 500 and I rang them to get an early settlement figure and they quoted me over £700 and said that’s how their system does it and sent me this email to explain it yet looking at it I have no idea what it means can anyone explain this because to me it looks like you need to be a NASA scientist
EXAMPLES ILLUSTRATING USE OF FORMULAE FOR CALCULATING REBATE FOR FULL AND PARTIAL EARLY
A loan of £5,000 is repayable by 48 monthly instalments of £134.57, starting one month after 1 March 2010 (the relevant date). The monthly repayments include interest and all other charges included in the total charge for credit. Thus the total amount repayable = £134.57 x 48 = £6,459.36. The total charge for credit = £6,459.36 – £5,000 = £1,459.36.
The debtor gives notice requesting full early settlement to take place immediately after payment of the 12th instalment (i.e. after one year) so that the settlement date is 1 March 2011.
Assuming that no charges are excluded from the calculation of the rebate under regulation 3(2) of the ESR 2004, the APR on the loan required for the calculation of the rebate is 14.0% per annum.
The instalments are exact numbers of calendar months from the settlement date and the periods are calculated in months, counting each month equal to one-twelfth of a year. Hence, for the purposes of the formula in Regulation 4(1) of the ESR 2004 (Formula 1 on page 11):
A1 = 5,000
BB1 =134.57=B2 =....=B48
r = 14.0/100 = 0.140
m=1
n = 12
a1 = 1 (working in periods of whole years) b1 = 11/12
URN 10/571
b2 = 10/12
b3 = 9/12
:
b11 = 1/12
b12 =0/12=0
Then the amount owing at the settlement date, immediately after payment of the 12th instalment, is:
5,000 x (1.140)1 – (134.57 x 1.140(11/12) + 134.57 x 1.140(10/12) + .... + 134.57 x 1.140(1/12) + 134.57 x 1.140(0/12))
= 5,700.00 – (151.74 + 150.10 + 148.47 + 146.85 + 145.26 + 143.68 + 142.12 + 140.58 + 139.05 + 137.54 + 136.05 + 134.57)
= 5,700.00 – 1,716.01 = £3,983.99.
The rebate in this case would be £860.53; this is calculated by deducting the early settlement figure of £3,983.99 from the total payments outstanding after the date assumed for calculating the rebate which is £4,844.52 (= 36 x £134.57).
If the creditor receives a request from the debtor for early settlement immediately after payment of the 12th instalment and regulation 5(a) of the ESR 2004 (which will be regulation 5(1)(a) in the ESR 2004 as amended by the regulations implementing the CCD) applies (making the settlement date 28 days after the debtor’s notice is received) then the settlement date will be 29 March 2011.
The periods involved are no longer an exact number of months (or weeks) and for these examples have been counted in years and days (or weeks where the periods are an exact number of weeks) in line with the TCCR 1980.
Hence, for the purposes of the formula in regulation 4(1) of the ESR 2004 (Formula 1 on page 11):
A1 = 5,000
BB1 =134.57=B2 =....=B48
r = 14.0/100 = 0.140
m=1
n = 12
a1 = 393 days = 1 year 28 days (working in periods of years and days, since not a whole number of weeks)
b1 = 0 years 362 days
b2 = 0 years 332 days
b3 = 0 years 301 days = 43 weeks
b4 = 0 years 271 days
b5 = 0 years 240 days
b6 = 0 years 209 days
b7 = 0 years 179 days
b8 = 0 years 148 days
b9 = 0 years 118 days
2
b10 = 0 years 87 days
b11 =0years56days=8weeks b12 =0years28days=4weeks
Then the amount owing at the settlement date of 29 March 2011 =
5,000 x (1.140)(1+28/365.25) – (134.57 x 1.140(362/365.25) + 134.57 x 1.140(332/365.25) + 134.57 x 1.140(43/52) + 134.57 x 1.140(271/365.25) + 134.57 x 1.140(240/365.25) + 134.57 x 1.140(209/365.25) + 134.57 x 1.140(179/365.25) + 134.57 x 1.140(148/365.25) + 134.57 x 1.140(118/365.25) + 134.57 x 1.140(87/365.25) + 134.57 x 1.140(8/52) + 134.57 x 1.140(4/52))
= 5,757.54 – (153.23 + 151.59 + 149.97 + 148.31 + 146.67 + 145.05 + 143.49 + 141.91 + 140.39 + 138.84 + 137.31 + 135.93)
= 5,757.54 – 1,732.69 = £4,024.85.
The rebate is calculated by deducting the early settlement figure of £4,024.85 from the total payments outstanding after the date assumed for calculating the rebate which is £4,844.52 (=36 x £134.57), giving a rebate of £819.67.
If the creditor elects to defer the settlement date by a further month under regulation 6 of the ESR 2004, this makes the date for calculating the rebate the 28th day after the payment date for the 13th instalment (29 April 2011).
Hence, for the purposes of the formula in regulation 4(1) of the ESR 2004 (Formula 1 on page 11):
n = 13
a1 = 424 days = 1 year 59 days (working in periods of years and days, since not a whole number of weeks)
b1 = 393 days = 1 year 28 days (working in periods of years and days, since not a whole number of weeks)
b2 = 0 years 363 days
b3 = 0 years 332 days
b4 = 0 years 302 days
b5 = 0 years 271 days
b6 = 0 years 240 days
b7 = 0 years 210 days = 30 weeks
b8 = 0 years 179 days
b9 = 0 years 149 days
b10 = 0 years 118 days
b11 = 0 years 87days
b12 = 0 years 59 days
b13 =0years28days=4weeks
Then the loan outstanding as at 29 April 2011, calculated by the formula in regulation 4(1) of the ESR 2004 (Formula 1 on page 11)
= 5,000 x (1.140)(1+59/365.25) – (134.57 x 1.140(1+28/365.25) + 134.57 x 1.140(363/365.25) + 134.57 x 1.140(332/365.25) + 134.57 x 1.140(302/365.25) + 134.57 x 1.140(271/365.25) + 134.57
3
x 1.140(240/365.25) + 134.57 x 1.140(30/52) + 134.57 x 1.140(179/365.25) + 134.57 x 1.140(149/365.25) + 134.57 x 1.140(118/365.25) + 134.57 x 1.140(87/365.25) + 134.57 x 1.140(59/365.25) + 134.57 x 1.140(4/52))
= 5,821.93 – (154.96+153.29 + 151.59 + 149.97 + 148.31 + 146.67 + 145.14 + 143.49 + 141.96 + 140.39 + 138.84 + 137.45 + 135.93)
= 5,821.93 – 1,887.99 = £3,933.94.
The above formula assumes that the borrower will pay on the due date the instalment due between the date of request for early repayment and the settlement date assumed for calculating the rebate (i.e. the 13th repayment of £134.57 due on 1 April 2011). If the borrower does make this payment on 1 April 2011, the rebate would be £776.01 which is calculated by deducting the early settlement figure of £3,933.94 from the total payments outstanding after the date assumed for calculating the rebate which is £4,709.95 (=35 x £134.57).
If it is agreed that the borrower does not make the payment on 1 April 2011 but defers paying until the settlement date then the period b13 in the above formula will be 0 rather than 28 days and the amount outstanding will be 5,821.93 – 1,886.63 = £3,935.30. In this case, the rebate would be £774.65 which is calculated by deducting the early settlement figure of £3,935.30 from the total payments outstanding after the date assumed for calculating the rebate which is £4,709.95 (=35 x £134.57).
Partial early settlement
A loan of £5,000 is repayable by 48 monthly instalments of £134.57, starting one month after 1 March 2010 (the relevant date). The monthly repayments include interest and all other charges included in the total charge for credit. Thus the total amount repayable = £134.57 x 48 = £6,459.36. The total charge for credit = £6,459.36 – £5,000 = £1,459.36.
The debtor makes a partial early repayment of £1,000.00 immediately after the 12th instalment, on 1 March 2011. The amount owing at this date, before the partial early repayment is made, is calculated using the formula in regulation 4(1) of the ESR 2004 (Formula 1 on page 11) as per the example on page 1, and P = £1,000.00, leaving £3,983.99 - £1,000.00 = £2,983.99 as the outstanding amount to be repaid after the partial early repayment.
The amount of rebate depends on how the outstanding amount after partial early settlement is to be repaid following the settlement date. Two possible approaches are set out in the following examples. These examples use Formula 3, the optional formula for calculating rescheduled payments, on page 11.
(i) Same term, reduced future repayments of credit
If the borrower has asked for the repayment term to be kept the same and that the reduced future repayments of credit should be of equal amount, then the revised future repayment amounts Ex could be calculated as follows (using the optional formula for rescheduled payments):
4
Amount outstanding after partial early repayment = £2,983.99 E1 =E2 =....=E36
r = 14.0/100 = 0.140
q = 36
e1 = 1/12 e2 = 2/12 e3 = e/12 :
e35 = 35/12 e36 = 36/12
Then the revised repayments after the settlement date would be:
2983.99 = E1/1.140(1/12) + E2/1.140(2/12) + .... + E35/1.140(35/12) + E36/1.140(36/12)
= E1 x (0.98914 + 0.97840 + .... + 0.68238 + 0.67497) (since E1 = E2 = .... = E36) = E1 x 29.60496
So E1 = 2983.99/29.60496 = £100.79.
(In this case, as the payment term remains the same, and all the repayments are to remain equal, this is the same result as multiplying the original repayment by the ratio of the loan outstanding after partial repayment to that outstanding before partial repayment ie the new repayment = £134.57 x 2,983.99/3,983.99 = £100.79.)
The rebate in this case would be £216.08. This is calculated using the formula in regulation 4A(2) of the ESR 2004 as amended by the regulations implementing the CCD (Formula 2 on page 11), by deducting the partial early repayment of £1,000.00 (P in the formula) together with the total payments now outstanding (= 36 x £100.79 = £3,628.44 = K in the formula) from the total amount of the repayments of credit that would fall due for payment after the settlement date if early settlement did not take place (= 36 x £134.57 = £4,844.52 = F in the formula).
(ii) Reduced future term, same repayments of credit as before partial repayment
If the borrower opts to keep the same repayment amounts as before the partial repayment then the outstanding term will be shortened. In this case the number of future repayments, q, might be determined such that
E1/1.140(1/12) + E2/1.140(2/12) + .... + Eq-1/1.140([q-1]/12) + Eq/1.140(q/12)
< 2983.99 < E1/1.140(1/12) + E2/1.140(2/12) + .... + Eq/1.140(q/12) + Eq+1/1.140([q+1]/12)
where E1 = E2 = .... = Eq (1/12) (2/12)
For q = 25 (the number of future repayments), E1/1.140 + E2/1.140 + .... + E24/1.140([q-1]/12) + E25/1.140(q/12)
= E1 x 21.75898 = 134.57 x 21.75898 = 2928.11
For q = 26 (the number of future repayments), E1/1.140(1/12) + E2/1.140(2/12) + .... + E25/1.140([q-1]/12) + E26/1.140(q/12)
= E1 x 22.51182 = 134.57 x 22.51182 = 3029.42
5
Hence, in this case there would be 25 future payments of £134.57, leaving a remaining payment of £2,983.99 – £2,928.11 = £55.88 if paid at the date of settlement. If the outstanding amount is paid at a later date then the amount would be increased with interest at 14% per annum. Thus if paid as a final repayment after 26 months, the payment would be £55.68 x 1.140(26/12) = £74.23.
If a payment of £74.23 is made as the 26th repayment, the rebate will be £406.04. This is calculated by deducting the partial early settlement figure of £1,000.00 together with the total payments now outstanding (= 25 x £134.57 + £74.23 = £3,438.48 = K in the formula) from the total payments outstanding after the settlement date had partial repayment not taken place (= 36 x £134.57 = £4,844.52 = F in the formula).
If regulation 5(2) of the ESR 2004 as amended by the regulations implementing the CCD applies (making the settlement date 28 days after the debtor’s notice is received) then the settlement date will be 29 March 2011. The periods involved are no longer an exact number of months (or weeks) and under the TCCR 1980 have been counted in years and days (or weeks where the periods are an exact number of weeks).
The amount outstanding at the settlement date = £4,024.85 (calculated using the formula in regulation 4(1) as per the example on page 2). If a partial early repayment of £1,000 is made at the settlement date, then P = £1,000.00 leaving £4,024.85 =- £1,000 = £3,024.85 as the outstanding amount to be repaid.
Again, the amount of the rebate depends on how the outstanding amount after partial early settlement is to be repaid following the settlement date. Two possible approaches are set out in the following examples. These examples use Formula 3, the optional formula for calculating rescheduled payments, on page 11.
(i) Same term, reduced future repayments of credit
If the borrower has asked for the repayment term to be kept the same and that the reduced future repayments of credit should be of equal amount, then the revised future repayment amounts Ex could be calculated as follows (using the optional formula for rescheduled payments):
Amount outstanding after partial early settlement = 3,024.85 E1 =E2 =....=E36
r = 14.0/100 = 0.140
q = 36
e1 = 0 years 3 days e2 = 0 years 33 days e3 = 0 years 64 days :
e12 = 338 days (NB number of days here and subsequently allows for leap year in 2012)
e13 = 369 days = 1 year 3 days (working in periods of years and days, since period is not a whole number of weeks; in this case the leap year affects the number of days but not the number of years and days)
e14 = 399 days = 57 weeks
:
e34 = 1009 days = 2 year 278 days
6
e35 = 1040 days = 2 year 309 days e36 = 1068 days = 2 year 337 days
Then the revised repayments after the settlement date would be:
3024.85 = E1/1.140(3/365.25) + E2/1.140(33/365.25) + E3/1.140(64/365.25) + ....
+ E12/1.140(338/365.25) + E13/1.140(1+3/365.25) + E14/1.140(57/52) +....
+ E34/1.140(2+278/365.25) + E35/1.140(2+309/365.25) + E36/1.140(2+337/365.25)
= E1 x (0.99892 + 0.98823 + 0.97730 + ....+ 0.88581 + 0.87625 + 0.86621 +....+ 0.69643 + 0.68873 + 0.68185) (since E1 = E2 = .... = E36)
= E1 x 29.89121
So E1 = 3,024.85/29.89121 = £101.20.
(In this case, as the payment term remains the same, and all the repayments are to remain equal, this is broadly the same result as multiplying the original repayment by the ratio of the loan outstanding after partial repayment to that outstanding before partial repayment ie new repayment = £134.57 x 3024.85/4024.85 = £101.14. The difference is due to calculating the time periods in a different way.)
The rebate in this case would be £201.32. This is calculated using the formula in regulation 4A(2) of the ESR 2004 as amended by the regulations implementing the CCD (Formula 2 on page 11), by deducting the partial early settlement figure of £1,000.00 (P in the formula) together with the total payments now outstanding (= 36 x £101.20 = £3,643.20 = K in the formula) from the amount of repayments of credit that would fall due for payment after the settlement date if early settlement did not take place (= 36 x £134.57 = £4,844.52 = F in the formula).
(ii) Reduced future term, same repayments of credit as before partial repayment
If the borrower opts to keep the same repayment amounts as before the partial repayment then the outstanding term will be shortened. In this case the number of future repayments, q, needs to be determined such that
E1/1.140(3/365.25) + E2/1.140(33/365.25) + E3/1.140(64/365.25) + .... + Eq-1/1.140([q-1]/365.25) + Eq/1.140(q/365.25)
< 3024.85 < E1/1.140(3/365.25) + E2/1.140(33/365.25) + E3/1.140(64/365.25) + .... + Eq/1.140(q/365.25) + Eq+1/1.140([q+1]/365.25)
whereE1 =E2 =....=Eq
and in this case the time periods involved are counted in years and days (or weeks where the periods are an exact number of weeks).
For q = 25, E1/1.140(3/365.25) + E2/1.140(33/365.25) + .... + E25/1.140(2+3/365.25) = E1 x 21.96960 = 134.57 x 21.96960 = 2956.45
For q = 26, E1/1.140(3/365.25) + E2/1.140(33/365.25) + .... + E25/1.140(2+3/365.25) + E26/1.140(2+33/365.25)
= E1 x 22.73001 = 134.57 x 22.73001 = 3058.78.
7
Hence, in this case there would be 25 future payments of £134.57 leaving a remaining payment of £3,024.85 – £2,956.45 = £68.40 if paid at the date of settlement. If the outstanding amount is paid at a later date then the amount would be increased with interest at 14% per annum. Thus if paid as a final 26th future repayment one month after the 25th future repayment of £134.57, the payment would be £68.40 x 1.140(2+33/365.25) = £89.95.
If a payment of £89.95 is made as the 26th repayment, the rebate will be £390.32. This is calculated using the formula in regulation 4A(2) of the ESR 2004 as amended by the regulations implementing the CCD (Formula 2 on page 11), by deducting the partial early settlement figure of £1,000.00 (P in the formula) together with the total payments now outstanding (= 25 x £134.57 + £89.95 = £3,454.20 = K in the formula) from the total payments outstanding after the settlement date had partial repayment not taken place (= 36 x £134.57 = £4,844.52 = F in the formula).
If the creditor elects to defer the settlement date by a further month for the calculation of the rebate under regulation 6 of the ESR 2004, the settlement date for calculating the rebate is 29 April 2011. The periods involved are no longer an exact number of months (or weeks) and under the TCCR 1980 have been counted in years and days (or weeks where the periods are an exact number of weeks).
The amount outstanding at the settlement date = £3,933.94, assuming payment of the 13th instalment on 1 April 2011 (calculated using the formula in regulation 4(1) of the ESR 2004 (Formula 1 on page 11) as per the example on page 3). If a partial repayment of £1,000.00 is made at the settlement date, then P = £1,000.00 leaving £3,933.94 - £1,000.00 = £2,933.94 as the outstanding amount to be repaid.
Again, the amount of the rebate depends on how the outstanding amount after partial early settlement is to be repaid following the settlement date. Two possible approaches are set out in the following examples. These examples use Formula 3 (the optional formula for calculating rescheduled payments) on page 11.
(i) Same term, reduced future repayments of credit
If the borrower has asked for the repayment term to be kept the same and that the reduced future repayments of credit should be of equal amount, then the revised future repayment amounts Ex could be calculated as follows:
Amount outstanding at the settlement date = 2,933.94 E1 =E2 =....=E36
r = 14.0/100 = 0.140
q = 36
e1 = 0 years 2 days
e2 = 0 years 33 days
e3 =0years63days=9weeks
:
e11 = 307 days (NB number of days here and subsequently allows for leap year in 2012)
e12 = 338 days
e13 = 368 days = 1 year 2 days (working in periods of years and days, since period is not a whole
number of weeks; in this case the leap year affects the number of days but not the number of years and days)
8
:
e33 = 978 days = 2 years 247 days e34 = 1009 days = 2 years 278 days e35 = 1037 days = 2 years 306 days
Then the revised repayments after the settlement date calculated would be:
2933.94 = E1/1.140(2/365.25) + E2/1.140(33/365.25) + E3/1.140(9/52) + .... + + E11/1.140(307/365.25) + E12/1.140(338/365.25) + E13/1.140(1+2/365.25) +....
E33/1.140(2+247/365.25) + E34/1.140(2+278/52) + E35/1.140(2+306/365.25)
= E1 x (0.99928 + 0.98823 + 0.97758 + .... + 0.89572 + 0.88581 + 0.87656 +....+ 0.70422 + 0.69643 + 0.68947) (since E1 = E2 = .... = E35)
= E1 x 29.21456
So E1 = 2,933.94/29.21456 = £100.43.
(In this case, as the payment term remains the same, and all the repayments are to remain equal, this is broadly the same result as multiplying the original repayment by the ratio of the loan outstanding after partial repayment to that outstanding before partial repayment ie new repayment = £134.57 x 2933.94/3933.94 = £100.36. The difference is due to calculating time periods in a different way under the TCCR 1980.)
The rebate in this case would be £194.90. This is calculated using the formula in regulation 4A(2) of the ESR 2004 as amended by the regulations implementing the CCD (Formula 2 on page 11), by deducting the partial early settlement figure of £1,000.00 (P in the formula) together with the total payments now outstanding (= 35 x £100.43 = £3,515.05) from the total payments outstanding after the settlement date had partial repayment not taken place (= 35 x £134.57 = £4,709.95 = F in the formula).
(ii) Reduced future term, same repayments of credit as before partial repayment
If the borrower opts to keep the same repayment amounts as before the partial repayment then the outstanding term will be shortened. In this case the number of future repayments, q, needs to be determined such that
E1/1.140(2/365.25) + E2/1.140(33/365.25) + E3/1.140(9/52) + .... + Eq-1/1.140([q-1]/365.25) + Eq/1.140(q/365.25)
< 2933.94 < E1/1.140(2/365.25) + E2/1.140(33/365.25) + E3/1.140(9/52) + .... + Eq/1.140(q/365.25) + Eq+1/1.140([q+1]/365.25)
whereE1 =E2 =....=Eq
and in this case the time periods involved are counted in years and days (or weeks where the periods are an exact number of weeks).
For q = 24, E1/1.140(2/365.25) + E2/1.140(33/365.25) + .... + E24/1.140(1+337/365.25) = E1 x 21.20435 = 134.57 x 21.20435 = 2853.47
For q = 25, E1/1.140(3/365.25) + E2/1.140(33/365.25) + .... + E24/1.140(1+337/365.25) + E25/1.140(2+2/365.25)
9
= E1 x 21.97327 = 134.57 x 21.97327 = 2956.94.
Hence, in this case there would be 24 future payments of £134.57 leaving a remaining payment of £2,933.94 – £2,853.47 = £80.47 if paid at the date of settlement. If the outstanding amount is paid at a later date then the amount would be increased with interest at 14% per annum. Thus if paid as a final 25th future repayment one month after the 24th future repayment of £134.57, the payment would be £80.47 x 1.140(2+2/365.25) = £104.65.
If a payment of £104.65 is made as the 25th repayment, the rebate will be £375.62. This is calculated using the formula in regulation 4A(2) of the ESR 2004 as amended by the implementing regulations (Formula 2 on page 11), by deducting the partial early settlement figure of £1,000.00 (P in the formula) together with the total payments now outstanding (= 24 x £134.57 + £104.65 = £3334.33 = K in the formula) from the total payments outstanding after the settlement date had partial repayment not taken place (= 35 x £134.57 = £4709.95 = F in the formula).
10
1)
Current rebate formula for full early settlement (to be retained)
2)
i=1 j=1
where:
Ai = the amount of ith advance of credit
Bj = the amount of the jth repayment of credit
r = the annual rate equivalent of the APR/100 (ie if rate of interest is 12%, r = 0.12)
m = the number of advances of credit made before the settlement date
n = the number of repayments of credit made before the settlement date
ai = the time between the ith advance of credit and the settlement date expressed in years and days, or whole weeks or months, as appropriate, and
bj = the time between the jth repayment of credit and the settlement date expressed in years and days, or whole weeks or months, as appropriate
Settlement date = up to 28 days plus one month (or 30 days) from date of notification of early repayment, depending on the particular circumstances.
Rebate formula for partial early settlement
F−K−P where:
F = the total amount of repayments of credit that would fall due for payment after the settlement date if early settlement did not take place,
K = the total amount of repayments of credit that will fall due for payment after the settlement date if early settlement takes place; in calculating K—
(i) the amount of the credit outstanding from the debtor and the amount of the accrued charges remaining unpaid by the debtor under the agreement on the settlement date if early settlement did take place is to be determined in accordance with the formula given in regulation 4(1); and
(ii) the amount paid by the debtor to the creditor where early settlement takes place shall be treated as though it were reduced by the amount (if any) which the creditor may claim under section 95A(1) of the Act,
and
P = the amount paid by the debtor to the creditor where early settlement takes place.
Optional formula for calculating rescheduled payments
S – P = ∑q E x / ( 1 + r ) e x x=1
where:
S = amount that remains to be paid calculated at the settlement date (the figure given by the first formula)
P = amount of the early partial repayment
q = the number of loan instalment repayments to be made after the settlement date
Ex = the amount of xth repayment of credit after the settlement date
r = the annual rate equivalent of the APR/100 (ie if rate of interest is 12%, r = 0.12)
ex = the time from the settlement date to payment of the xth repayment, (if following the TCCR these would be expressed in years and days, or whole weeks or months, as appropriate).
3)
mnb
∑A(1+r)ai –∑B(1+r)j ij
11
EXAMPLES ILLUSTRATING USE OF FORMULAE FOR CALCULATING REBATE FOR FULL AND PARTIAL EARLY
A loan of £5,000 is repayable by 48 monthly instalments of £134.57, starting one month after 1 March 2010 (the relevant date). The monthly repayments include interest and all other charges included in the total charge for credit. Thus the total amount repayable = £134.57 x 48 = £6,459.36. The total charge for credit = £6,459.36 – £5,000 = £1,459.36.
The debtor gives notice requesting full early settlement to take place immediately after payment of the 12th instalment (i.e. after one year) so that the settlement date is 1 March 2011.
Assuming that no charges are excluded from the calculation of the rebate under regulation 3(2) of the ESR 2004, the APR on the loan required for the calculation of the rebate is 14.0% per annum.
The instalments are exact numbers of calendar months from the settlement date and the periods are calculated in months, counting each month equal to one-twelfth of a year. Hence, for the purposes of the formula in Regulation 4(1) of the ESR 2004 (Formula 1 on page 11):
A1 = 5,000
BB1 =134.57=B2 =....=B48
r = 14.0/100 = 0.140
m=1
n = 12
a1 = 1 (working in periods of whole years) b1 = 11/12
URN 10/571
b2 = 10/12
b3 = 9/12
:
b11 = 1/12
b12 =0/12=0
Then the amount owing at the settlement date, immediately after payment of the 12th instalment, is:
5,000 x (1.140)1 – (134.57 x 1.140(11/12) + 134.57 x 1.140(10/12) + .... + 134.57 x 1.140(1/12) + 134.57 x 1.140(0/12))
= 5,700.00 – (151.74 + 150.10 + 148.47 + 146.85 + 145.26 + 143.68 + 142.12 + 140.58 + 139.05 + 137.54 + 136.05 + 134.57)
= 5,700.00 – 1,716.01 = £3,983.99.
The rebate in this case would be £860.53; this is calculated by deducting the early settlement figure of £3,983.99 from the total payments outstanding after the date assumed for calculating the rebate which is £4,844.52 (= 36 x £134.57).
If the creditor receives a request from the debtor for early settlement immediately after payment of the 12th instalment and regulation 5(a) of the ESR 2004 (which will be regulation 5(1)(a) in the ESR 2004 as amended by the regulations implementing the CCD) applies (making the settlement date 28 days after the debtor’s notice is received) then the settlement date will be 29 March 2011.
The periods involved are no longer an exact number of months (or weeks) and for these examples have been counted in years and days (or weeks where the periods are an exact number of weeks) in line with the TCCR 1980.
Hence, for the purposes of the formula in regulation 4(1) of the ESR 2004 (Formula 1 on page 11):
A1 = 5,000
BB1 =134.57=B2 =....=B48
r = 14.0/100 = 0.140
m=1
n = 12
a1 = 393 days = 1 year 28 days (working in periods of years and days, since not a whole number of weeks)
b1 = 0 years 362 days
b2 = 0 years 332 days
b3 = 0 years 301 days = 43 weeks
b4 = 0 years 271 days
b5 = 0 years 240 days
b6 = 0 years 209 days
b7 = 0 years 179 days
b8 = 0 years 148 days
b9 = 0 years 118 days
2
b10 = 0 years 87 days
b11 =0years56days=8weeks b12 =0years28days=4weeks
Then the amount owing at the settlement date of 29 March 2011 =
5,000 x (1.140)(1+28/365.25) – (134.57 x 1.140(362/365.25) + 134.57 x 1.140(332/365.25) + 134.57 x 1.140(43/52) + 134.57 x 1.140(271/365.25) + 134.57 x 1.140(240/365.25) + 134.57 x 1.140(209/365.25) + 134.57 x 1.140(179/365.25) + 134.57 x 1.140(148/365.25) + 134.57 x 1.140(118/365.25) + 134.57 x 1.140(87/365.25) + 134.57 x 1.140(8/52) + 134.57 x 1.140(4/52))
= 5,757.54 – (153.23 + 151.59 + 149.97 + 148.31 + 146.67 + 145.05 + 143.49 + 141.91 + 140.39 + 138.84 + 137.31 + 135.93)
= 5,757.54 – 1,732.69 = £4,024.85.
The rebate is calculated by deducting the early settlement figure of £4,024.85 from the total payments outstanding after the date assumed for calculating the rebate which is £4,844.52 (=36 x £134.57), giving a rebate of £819.67.
If the creditor elects to defer the settlement date by a further month under regulation 6 of the ESR 2004, this makes the date for calculating the rebate the 28th day after the payment date for the 13th instalment (29 April 2011).
Hence, for the purposes of the formula in regulation 4(1) of the ESR 2004 (Formula 1 on page 11):
n = 13
a1 = 424 days = 1 year 59 days (working in periods of years and days, since not a whole number of weeks)
b1 = 393 days = 1 year 28 days (working in periods of years and days, since not a whole number of weeks)
b2 = 0 years 363 days
b3 = 0 years 332 days
b4 = 0 years 302 days
b5 = 0 years 271 days
b6 = 0 years 240 days
b7 = 0 years 210 days = 30 weeks
b8 = 0 years 179 days
b9 = 0 years 149 days
b10 = 0 years 118 days
b11 = 0 years 87days
b12 = 0 years 59 days
b13 =0years28days=4weeks
Then the loan outstanding as at 29 April 2011, calculated by the formula in regulation 4(1) of the ESR 2004 (Formula 1 on page 11)
= 5,000 x (1.140)(1+59/365.25) – (134.57 x 1.140(1+28/365.25) + 134.57 x 1.140(363/365.25) + 134.57 x 1.140(332/365.25) + 134.57 x 1.140(302/365.25) + 134.57 x 1.140(271/365.25) + 134.57
3
x 1.140(240/365.25) + 134.57 x 1.140(30/52) + 134.57 x 1.140(179/365.25) + 134.57 x 1.140(149/365.25) + 134.57 x 1.140(118/365.25) + 134.57 x 1.140(87/365.25) + 134.57 x 1.140(59/365.25) + 134.57 x 1.140(4/52))
= 5,821.93 – (154.96+153.29 + 151.59 + 149.97 + 148.31 + 146.67 + 145.14 + 143.49 + 141.96 + 140.39 + 138.84 + 137.45 + 135.93)
= 5,821.93 – 1,887.99 = £3,933.94.
The above formula assumes that the borrower will pay on the due date the instalment due between the date of request for early repayment and the settlement date assumed for calculating the rebate (i.e. the 13th repayment of £134.57 due on 1 April 2011). If the borrower does make this payment on 1 April 2011, the rebate would be £776.01 which is calculated by deducting the early settlement figure of £3,933.94 from the total payments outstanding after the date assumed for calculating the rebate which is £4,709.95 (=35 x £134.57).
If it is agreed that the borrower does not make the payment on 1 April 2011 but defers paying until the settlement date then the period b13 in the above formula will be 0 rather than 28 days and the amount outstanding will be 5,821.93 – 1,886.63 = £3,935.30. In this case, the rebate would be £774.65 which is calculated by deducting the early settlement figure of £3,935.30 from the total payments outstanding after the date assumed for calculating the rebate which is £4,709.95 (=35 x £134.57).
Partial early settlement
A loan of £5,000 is repayable by 48 monthly instalments of £134.57, starting one month after 1 March 2010 (the relevant date). The monthly repayments include interest and all other charges included in the total charge for credit. Thus the total amount repayable = £134.57 x 48 = £6,459.36. The total charge for credit = £6,459.36 – £5,000 = £1,459.36.
The debtor makes a partial early repayment of £1,000.00 immediately after the 12th instalment, on 1 March 2011. The amount owing at this date, before the partial early repayment is made, is calculated using the formula in regulation 4(1) of the ESR 2004 (Formula 1 on page 11) as per the example on page 1, and P = £1,000.00, leaving £3,983.99 - £1,000.00 = £2,983.99 as the outstanding amount to be repaid after the partial early repayment.
The amount of rebate depends on how the outstanding amount after partial early settlement is to be repaid following the settlement date. Two possible approaches are set out in the following examples. These examples use Formula 3, the optional formula for calculating rescheduled payments, on page 11.
(i) Same term, reduced future repayments of credit
If the borrower has asked for the repayment term to be kept the same and that the reduced future repayments of credit should be of equal amount, then the revised future repayment amounts Ex could be calculated as follows (using the optional formula for rescheduled payments):
4
Amount outstanding after partial early repayment = £2,983.99 E1 =E2 =....=E36
r = 14.0/100 = 0.140
q = 36
e1 = 1/12 e2 = 2/12 e3 = e/12 :
e35 = 35/12 e36 = 36/12
Then the revised repayments after the settlement date would be:
2983.99 = E1/1.140(1/12) + E2/1.140(2/12) + .... + E35/1.140(35/12) + E36/1.140(36/12)
= E1 x (0.98914 + 0.97840 + .... + 0.68238 + 0.67497) (since E1 = E2 = .... = E36) = E1 x 29.60496
So E1 = 2983.99/29.60496 = £100.79.
(In this case, as the payment term remains the same, and all the repayments are to remain equal, this is the same result as multiplying the original repayment by the ratio of the loan outstanding after partial repayment to that outstanding before partial repayment ie the new repayment = £134.57 x 2,983.99/3,983.99 = £100.79.)
The rebate in this case would be £216.08. This is calculated using the formula in regulation 4A(2) of the ESR 2004 as amended by the regulations implementing the CCD (Formula 2 on page 11), by deducting the partial early repayment of £1,000.00 (P in the formula) together with the total payments now outstanding (= 36 x £100.79 = £3,628.44 = K in the formula) from the total amount of the repayments of credit that would fall due for payment after the settlement date if early settlement did not take place (= 36 x £134.57 = £4,844.52 = F in the formula).
(ii) Reduced future term, same repayments of credit as before partial repayment
If the borrower opts to keep the same repayment amounts as before the partial repayment then the outstanding term will be shortened. In this case the number of future repayments, q, might be determined such that
E1/1.140(1/12) + E2/1.140(2/12) + .... + Eq-1/1.140([q-1]/12) + Eq/1.140(q/12)
< 2983.99 < E1/1.140(1/12) + E2/1.140(2/12) + .... + Eq/1.140(q/12) + Eq+1/1.140([q+1]/12)
where E1 = E2 = .... = Eq (1/12) (2/12)
For q = 25 (the number of future repayments), E1/1.140 + E2/1.140 + .... + E24/1.140([q-1]/12) + E25/1.140(q/12)
= E1 x 21.75898 = 134.57 x 21.75898 = 2928.11
For q = 26 (the number of future repayments), E1/1.140(1/12) + E2/1.140(2/12) + .... + E25/1.140([q-1]/12) + E26/1.140(q/12)
= E1 x 22.51182 = 134.57 x 22.51182 = 3029.42
5
Hence, in this case there would be 25 future payments of £134.57, leaving a remaining payment of £2,983.99 – £2,928.11 = £55.88 if paid at the date of settlement. If the outstanding amount is paid at a later date then the amount would be increased with interest at 14% per annum. Thus if paid as a final repayment after 26 months, the payment would be £55.68 x 1.140(26/12) = £74.23.
If a payment of £74.23 is made as the 26th repayment, the rebate will be £406.04. This is calculated by deducting the partial early settlement figure of £1,000.00 together with the total payments now outstanding (= 25 x £134.57 + £74.23 = £3,438.48 = K in the formula) from the total payments outstanding after the settlement date had partial repayment not taken place (= 36 x £134.57 = £4,844.52 = F in the formula).
If regulation 5(2) of the ESR 2004 as amended by the regulations implementing the CCD applies (making the settlement date 28 days after the debtor’s notice is received) then the settlement date will be 29 March 2011. The periods involved are no longer an exact number of months (or weeks) and under the TCCR 1980 have been counted in years and days (or weeks where the periods are an exact number of weeks).
The amount outstanding at the settlement date = £4,024.85 (calculated using the formula in regulation 4(1) as per the example on page 2). If a partial early repayment of £1,000 is made at the settlement date, then P = £1,000.00 leaving £4,024.85 =- £1,000 = £3,024.85 as the outstanding amount to be repaid.
Again, the amount of the rebate depends on how the outstanding amount after partial early settlement is to be repaid following the settlement date. Two possible approaches are set out in the following examples. These examples use Formula 3, the optional formula for calculating rescheduled payments, on page 11.
(i) Same term, reduced future repayments of credit
If the borrower has asked for the repayment term to be kept the same and that the reduced future repayments of credit should be of equal amount, then the revised future repayment amounts Ex could be calculated as follows (using the optional formula for rescheduled payments):
Amount outstanding after partial early settlement = 3,024.85 E1 =E2 =....=E36
r = 14.0/100 = 0.140
q = 36
e1 = 0 years 3 days e2 = 0 years 33 days e3 = 0 years 64 days :
e12 = 338 days (NB number of days here and subsequently allows for leap year in 2012)
e13 = 369 days = 1 year 3 days (working in periods of years and days, since period is not a whole number of weeks; in this case the leap year affects the number of days but not the number of years and days)
e14 = 399 days = 57 weeks
:
e34 = 1009 days = 2 year 278 days
6
e35 = 1040 days = 2 year 309 days e36 = 1068 days = 2 year 337 days
Then the revised repayments after the settlement date would be:
3024.85 = E1/1.140(3/365.25) + E2/1.140(33/365.25) + E3/1.140(64/365.25) + ....
+ E12/1.140(338/365.25) + E13/1.140(1+3/365.25) + E14/1.140(57/52) +....
+ E34/1.140(2+278/365.25) + E35/1.140(2+309/365.25) + E36/1.140(2+337/365.25)
= E1 x (0.99892 + 0.98823 + 0.97730 + ....+ 0.88581 + 0.87625 + 0.86621 +....+ 0.69643 + 0.68873 + 0.68185) (since E1 = E2 = .... = E36)
= E1 x 29.89121
So E1 = 3,024.85/29.89121 = £101.20.
(In this case, as the payment term remains the same, and all the repayments are to remain equal, this is broadly the same result as multiplying the original repayment by the ratio of the loan outstanding after partial repayment to that outstanding before partial repayment ie new repayment = £134.57 x 3024.85/4024.85 = £101.14. The difference is due to calculating the time periods in a different way.)
The rebate in this case would be £201.32. This is calculated using the formula in regulation 4A(2) of the ESR 2004 as amended by the regulations implementing the CCD (Formula 2 on page 11), by deducting the partial early settlement figure of £1,000.00 (P in the formula) together with the total payments now outstanding (= 36 x £101.20 = £3,643.20 = K in the formula) from the amount of repayments of credit that would fall due for payment after the settlement date if early settlement did not take place (= 36 x £134.57 = £4,844.52 = F in the formula).
(ii) Reduced future term, same repayments of credit as before partial repayment
If the borrower opts to keep the same repayment amounts as before the partial repayment then the outstanding term will be shortened. In this case the number of future repayments, q, needs to be determined such that
E1/1.140(3/365.25) + E2/1.140(33/365.25) + E3/1.140(64/365.25) + .... + Eq-1/1.140([q-1]/365.25) + Eq/1.140(q/365.25)
< 3024.85 < E1/1.140(3/365.25) + E2/1.140(33/365.25) + E3/1.140(64/365.25) + .... + Eq/1.140(q/365.25) + Eq+1/1.140([q+1]/365.25)
whereE1 =E2 =....=Eq
and in this case the time periods involved are counted in years and days (or weeks where the periods are an exact number of weeks).
For q = 25, E1/1.140(3/365.25) + E2/1.140(33/365.25) + .... + E25/1.140(2+3/365.25) = E1 x 21.96960 = 134.57 x 21.96960 = 2956.45
For q = 26, E1/1.140(3/365.25) + E2/1.140(33/365.25) + .... + E25/1.140(2+3/365.25) + E26/1.140(2+33/365.25)
= E1 x 22.73001 = 134.57 x 22.73001 = 3058.78.
7
Hence, in this case there would be 25 future payments of £134.57 leaving a remaining payment of £3,024.85 – £2,956.45 = £68.40 if paid at the date of settlement. If the outstanding amount is paid at a later date then the amount would be increased with interest at 14% per annum. Thus if paid as a final 26th future repayment one month after the 25th future repayment of £134.57, the payment would be £68.40 x 1.140(2+33/365.25) = £89.95.
If a payment of £89.95 is made as the 26th repayment, the rebate will be £390.32. This is calculated using the formula in regulation 4A(2) of the ESR 2004 as amended by the regulations implementing the CCD (Formula 2 on page 11), by deducting the partial early settlement figure of £1,000.00 (P in the formula) together with the total payments now outstanding (= 25 x £134.57 + £89.95 = £3,454.20 = K in the formula) from the total payments outstanding after the settlement date had partial repayment not taken place (= 36 x £134.57 = £4,844.52 = F in the formula).
If the creditor elects to defer the settlement date by a further month for the calculation of the rebate under regulation 6 of the ESR 2004, the settlement date for calculating the rebate is 29 April 2011. The periods involved are no longer an exact number of months (or weeks) and under the TCCR 1980 have been counted in years and days (or weeks where the periods are an exact number of weeks).
The amount outstanding at the settlement date = £3,933.94, assuming payment of the 13th instalment on 1 April 2011 (calculated using the formula in regulation 4(1) of the ESR 2004 (Formula 1 on page 11) as per the example on page 3). If a partial repayment of £1,000.00 is made at the settlement date, then P = £1,000.00 leaving £3,933.94 - £1,000.00 = £2,933.94 as the outstanding amount to be repaid.
Again, the amount of the rebate depends on how the outstanding amount after partial early settlement is to be repaid following the settlement date. Two possible approaches are set out in the following examples. These examples use Formula 3 (the optional formula for calculating rescheduled payments) on page 11.
(i) Same term, reduced future repayments of credit
If the borrower has asked for the repayment term to be kept the same and that the reduced future repayments of credit should be of equal amount, then the revised future repayment amounts Ex could be calculated as follows:
Amount outstanding at the settlement date = 2,933.94 E1 =E2 =....=E36
r = 14.0/100 = 0.140
q = 36
e1 = 0 years 2 days
e2 = 0 years 33 days
e3 =0years63days=9weeks
:
e11 = 307 days (NB number of days here and subsequently allows for leap year in 2012)
e12 = 338 days
e13 = 368 days = 1 year 2 days (working in periods of years and days, since period is not a whole
number of weeks; in this case the leap year affects the number of days but not the number of years and days)
8
:
e33 = 978 days = 2 years 247 days e34 = 1009 days = 2 years 278 days e35 = 1037 days = 2 years 306 days
Then the revised repayments after the settlement date calculated would be:
2933.94 = E1/1.140(2/365.25) + E2/1.140(33/365.25) + E3/1.140(9/52) + .... + + E11/1.140(307/365.25) + E12/1.140(338/365.25) + E13/1.140(1+2/365.25) +....
E33/1.140(2+247/365.25) + E34/1.140(2+278/52) + E35/1.140(2+306/365.25)
= E1 x (0.99928 + 0.98823 + 0.97758 + .... + 0.89572 + 0.88581 + 0.87656 +....+ 0.70422 + 0.69643 + 0.68947) (since E1 = E2 = .... = E35)
= E1 x 29.21456
So E1 = 2,933.94/29.21456 = £100.43.
(In this case, as the payment term remains the same, and all the repayments are to remain equal, this is broadly the same result as multiplying the original repayment by the ratio of the loan outstanding after partial repayment to that outstanding before partial repayment ie new repayment = £134.57 x 2933.94/3933.94 = £100.36. The difference is due to calculating time periods in a different way under the TCCR 1980.)
The rebate in this case would be £194.90. This is calculated using the formula in regulation 4A(2) of the ESR 2004 as amended by the regulations implementing the CCD (Formula 2 on page 11), by deducting the partial early settlement figure of £1,000.00 (P in the formula) together with the total payments now outstanding (= 35 x £100.43 = £3,515.05) from the total payments outstanding after the settlement date had partial repayment not taken place (= 35 x £134.57 = £4,709.95 = F in the formula).
(ii) Reduced future term, same repayments of credit as before partial repayment
If the borrower opts to keep the same repayment amounts as before the partial repayment then the outstanding term will be shortened. In this case the number of future repayments, q, needs to be determined such that
E1/1.140(2/365.25) + E2/1.140(33/365.25) + E3/1.140(9/52) + .... + Eq-1/1.140([q-1]/365.25) + Eq/1.140(q/365.25)
< 2933.94 < E1/1.140(2/365.25) + E2/1.140(33/365.25) + E3/1.140(9/52) + .... + Eq/1.140(q/365.25) + Eq+1/1.140([q+1]/365.25)
whereE1 =E2 =....=Eq
and in this case the time periods involved are counted in years and days (or weeks where the periods are an exact number of weeks).
For q = 24, E1/1.140(2/365.25) + E2/1.140(33/365.25) + .... + E24/1.140(1+337/365.25) = E1 x 21.20435 = 134.57 x 21.20435 = 2853.47
For q = 25, E1/1.140(3/365.25) + E2/1.140(33/365.25) + .... + E24/1.140(1+337/365.25) + E25/1.140(2+2/365.25)
9
= E1 x 21.97327 = 134.57 x 21.97327 = 2956.94.
Hence, in this case there would be 24 future payments of £134.57 leaving a remaining payment of £2,933.94 – £2,853.47 = £80.47 if paid at the date of settlement. If the outstanding amount is paid at a later date then the amount would be increased with interest at 14% per annum. Thus if paid as a final 25th future repayment one month after the 24th future repayment of £134.57, the payment would be £80.47 x 1.140(2+2/365.25) = £104.65.
If a payment of £104.65 is made as the 25th repayment, the rebate will be £375.62. This is calculated using the formula in regulation 4A(2) of the ESR 2004 as amended by the implementing regulations (Formula 2 on page 11), by deducting the partial early settlement figure of £1,000.00 (P in the formula) together with the total payments now outstanding (= 24 x £134.57 + £104.65 = £3334.33 = K in the formula) from the total payments outstanding after the settlement date had partial repayment not taken place (= 35 x £134.57 = £4709.95 = F in the formula).
10
1)
Current rebate formula for full early settlement (to be retained)
2)
i=1 j=1
where:
Ai = the amount of ith advance of credit
Bj = the amount of the jth repayment of credit
r = the annual rate equivalent of the APR/100 (ie if rate of interest is 12%, r = 0.12)
m = the number of advances of credit made before the settlement date
n = the number of repayments of credit made before the settlement date
ai = the time between the ith advance of credit and the settlement date expressed in years and days, or whole weeks or months, as appropriate, and
bj = the time between the jth repayment of credit and the settlement date expressed in years and days, or whole weeks or months, as appropriate
Settlement date = up to 28 days plus one month (or 30 days) from date of notification of early repayment, depending on the particular circumstances.
Rebate formula for partial early settlement
F−K−P where:
F = the total amount of repayments of credit that would fall due for payment after the settlement date if early settlement did not take place,
K = the total amount of repayments of credit that will fall due for payment after the settlement date if early settlement takes place; in calculating K—
(i) the amount of the credit outstanding from the debtor and the amount of the accrued charges remaining unpaid by the debtor under the agreement on the settlement date if early settlement did take place is to be determined in accordance with the formula given in regulation 4(1); and
(ii) the amount paid by the debtor to the creditor where early settlement takes place shall be treated as though it were reduced by the amount (if any) which the creditor may claim under section 95A(1) of the Act,
and
P = the amount paid by the debtor to the creditor where early settlement takes place.
Optional formula for calculating rescheduled payments
S – P = ∑q E x / ( 1 + r ) e x x=1
where:
S = amount that remains to be paid calculated at the settlement date (the figure given by the first formula)
P = amount of the early partial repayment
q = the number of loan instalment repayments to be made after the settlement date
Ex = the amount of xth repayment of credit after the settlement date
r = the annual rate equivalent of the APR/100 (ie if rate of interest is 12%, r = 0.12)
ex = the time from the settlement date to payment of the xth repayment, (if following the TCCR these would be expressed in years and days, or whole weeks or months, as appropriate).
3)
mnb
∑A(1+r)ai –∑B(1+r)j ij
11
0
Comments
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What was the rate, what payments have you made to date, and at what times?0
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Not sure what the rate was but this is the payment Setup Date I’ve paid between 450 and 460 off the original 500
16/04/2019 13:16
First Payment Date 15/05/2019
No. of payments 18
Recurrence Occurs 15th day of each month
Payment Amount £114.280 -
That suggests your APR is around 280%, which means you've only paid around £20-30 off the original £500.
The settlement included two months interest, which sounds about right. The sooner you settle it, the better.0 -
Been reading some reviews seems like a bad company should have done that first lol well will pay and be done thx for your replies0
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There is a limit to the amount of total interest that you can pay - https://www.moneyadviceservice.org.uk/en/articles/payday-loans-what-you-need-to-know.
https://www.money.co.uk/guides/fca-payday-loan-caps-your-faqs-answered.htm
You should never pay back more than twice the original amount. So if you borrow £500 and you have already paid about £457.12 (assuming 4 payments) , then it seems to me the maximum settlement figure they can charge is £542.88 ( £1000 - £457.12). I will raise this issue with the payday loan company.
If your first payment was on 15-May, you should have paid £571.4 and settlement figure should not be more than £428.6.0 -
You should never pay back more than twice the original amount. So if you borrow £500 and you have already paid about £457.12 (assuming 4 payments) , then it seems to me the maximum settlement figure they can charge is £542.88 ( £1000 - £457.12). I will raise this issue with the payday loan company.
If your first payment was on 15-May, you should have paid £571.4 and settlement figure should not be more than £428.6.[/QUOTE]
They say they are NOT a payday company so the new FCA rules do not apply to them...their words not mine0 -
What company is it?
They can call themselves what they like, but at that interest rate, they are a high-cost lender and the rule should apply to them. Anybody can say they are not a payday lender. The rule specifically mentions high-cost short-term lender. The reason the the rule is titled that way is mainstream lenders wouldn't even dream of charging such interest rates.
I will raise a complaint about their non-compliance with FCA rule and escalate to the ombudsman if they fail to resolve favorably with their final response letter. I am sure you will easily win and maybe even get some 'compensation' from the FCA and will likely back down when face with the threat of escalation.
Use https://resolver.co.uk to raise the complaints.0 -
The company is called loans2go0
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loans2go: Representative APR is 989.9%. So the OP got it cheap then...
Seriously, you took out a loan with no idea of the APR payable?No free lunch, and no free laptop
0 -
As I understand it the cap applies to high-cost short-term loans.What company is it?
They can call themselves what they like, but at that interest rate, they are a high-cost lender and the rule should apply to them. Anybody can say they are not a payday lender. The rule specifically mentions high-cost short-term lender. The reason the the rule is titled that way is mainstream lenders wouldn't even dream of charging such interest rates.
I will raise a complaint about their non-compliance with FCA rule and escalate to the ombudsman if they fail to resolve favorably with their final response letter. I am sure you will easily win and maybe even get some 'compensation' from the FCA and will likely back down when face with the threat of escalation.
Use https://resolver.co.uk to raise the complaints.
As the OP is paying over 18 months I wouldn't say that's short-term.0
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