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Front loaded car loan
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Hi,
I'm in the process of buying a new car. Im on a pcp deal now. Reasonable rates of interest. I thought I'd paid off way more than I had due to this being a front loaded loan. Its a Barclays loan. I didn't know that this was the case at the beginning of the loan. I truly believe I have been mis-sold this. What are my rights here?
Thanks,
John
I'm in the process of buying a new car. Im on a pcp deal now. Reasonable rates of interest. I thought I'd paid off way more than I had due to this being a front loaded loan. Its a Barclays loan. I didn't know that this was the case at the beginning of the loan. I truly believe I have been mis-sold this. What are my rights here?
Thanks,
John
0
Comments
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The loan wasn't front loaded, so no mis selling.
You've just miscalculated how the interest works.
Your rights are to ask for a settlement figure if you wish to clear it early or just to continue paying.4 -
I don't understand. How does the interest work? Surely it should just be added monthly instead of how it has been added, which is mostly in the first year. The guy at Barclays on the phone described it as being 'front loaded'.0
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Interest is calculated daily and added monthly.
You pay more in the first year as the balance is higher.
There is no front loading.
4 -
Even though the guy at Barclays expressly said 'front loaded'???!!0
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I borrowed 11,825.
Ive paid 2544
They say I owe 11,397
How on earth as all the interest not just been added onto the beginning of the repayments?0 -
Exactly.JohnBailz said:Even though the guy at Barclays expressly said 'front loaded'???!!1 -
Exactly?
You say it's not front loaded, he says it is front loaded. Is it front loaded or not?0 -
JohnBailz said:I borrowed 11,825.
Ive paid 2544
They say I owe 11,397
How on earth as all the interest not just been added onto the beginning of the repayments?
You can calculate the interest by using your monthly rate on the outstanding capital each month.1 -
Interest is calculated daily on the outstanding balance and at the beginning the capital balance is high thus a lot of interest. As you go on the balance decreases so less interest is added daily and more capital is paid off. https://www.theguardian.com/money/loan-repayment-calculator-interest-rates will give you an idea of how it works.
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But maybe I've paid all the interest off now? And only just started on the actual amount?0
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