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What did I miss?
Comments
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It is.So I know I am paying interest on the £9k as it will be 13k I'm actually paying in the end.
Every month I pay a fixed £108.26 a month which is about £13k after 120 months...BUT my annual statement also says I'm paying £58 interest (approx) every month aswell. So I'm only really actually paying £50 a month.
This is the bit I don't get? I thought the interest was the difference between the loan amount and the final amount.
But the difference is each month you pay a bit of capital and a bit of interest.
At the start of a loan you pay more in interest, as you owe more money. Then as your term increases you pay less in interest, as you owe less.
That's how loans work."Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."0 -
It is.
But you're not paying £58 interest every month. It goes down each month, because it's charged on your balance, which is always going down.
Your monthly payments include the interest.0 -
So I know I am paying interest on the £9k as it will be 13k I'm actually paying in the end.
Every month I pay a fixed £108.26 a month which is about £13k after 120 months...BUT my annual statement also says I'm paying £58 interest (approx) every month aswell. So I'm only really actually paying £50 a month.
This is the bit I don't get? I thought the interest was the difference between the loan amount and the final amount.
The £58 will go down as you pay off more of the 9k.
The interest IS the difference between the loan and the final amount, and it is factored into your monthly payment...
I dont understand what you dont understand now. The amount you pay off will still be the same even when you are describing your 'issue' with it... What are you unhappy with?0 -
10 years for a loan of less than £10K with a high interest rate.
Please don't say that this loan was for a used car !0 -
13091 minus 9808 will be the total interest paid over the life of the loan, assuming you make the payments as scheduled. (None missed, no extras).
At the moment the interest being added on is about half of your monthly repayment. But as the loan's balance goes down, the interest will also go down, so less and less of the monthly repayment goes towards interest. So although you repay the same amount every month, the remaining money you owe initially decreases somewhat slowly but then accelerates downwards towards the end of the loan.
By my maths it's about a 3% AER, so not extortionate. For that amount over that term I'm guessing home improvements.10 years for a loan of less than £10K with a high interest rate0 -
So basically I am not paying more than £13k and this is the interest I am already aware of....thanks for clearing this up everyone...panic over...0
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I'm guessing 'borrower's regret'.KatrinaWaves wrote: »I dont understand what you dont understand now. The amount you pay off will still be the same even when you are describing your 'issue' with it... What are you unhappy with?"Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."0 -
13091 minus 9808 will be the total interest paid over the life of the loan, assuming you make the payments as scheduled. (None missed, no extras).
At the moment the interest being added on is about half of your monthly repayment. But as the loan's balance goes down, the interest will also go down, so less and less of the monthly repayment goes towards interest. So although you repay the same amount every month, the remaining money you owe initially decreases somewhat slowly but then accelerates downwards towards the end of the loan.
By my maths it's about a 3% AER, so not extortionate. For that amount over that term I'm guessing home improvements.
Thanks for explaining this. It just looked like I would be paying more that the £13k I already know about :rotfl:0 -
Silvertabby wrote: »10 years for a loan of less than £10K with a high interest rate.
Please don't say that this loan was for a used car !
Ok my misunderstanding then. I thought I would be paying more than the £13k!
The loan was for solar panels. And yes I have made money back from it over the year £130 so far0 -
Take a look at post #3 in this thread:
https://forums.moneysavingexpert.com/discussion/6097578/calculation-confusion
someone has broken it out very nicelyI’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
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