High car loan interest rate

biscuit1_2

Hi all just been having a chat with my son, just chit chat and we got onto the subject somehow of his car loan, as he seems to be paying a lot for his car, now i may be wrong but i thought there was a maximum rate that could be charged, and i have got usury in my head, he is being charged 39.4%. On a £5800 loan he is paying £12662 in total which at first glance to me looks higher than 39.4%. It's fair to say when he took the loan out 28 months ago his history was not good, but he needed a car, can anyone confirm if this rate is normal.
Cheers 

[Deleted User]

It's impossible to say what the rate is without the term. 

But high rates are normal for high risk customers.

biscuit1_2

So maybe usury doesn't come into it then i take it 

DrEskimo

If it was over 4.5yrs then it would amount to around £12,600 total amount payable.

Tell him to pay it off as quickly as humanly possible....

[Deleted User]

biscuit1_2 said:

So maybe usury doesn't come into it then i take it 

No. Usury tends to just be a term used when people regret their earlier decisions.

biscuit1_2

Not really used loans for a while, is the interest rate charged up front even if paid off early 

biscuit1_2

usury

Usury means lending money at exorbitant interest rates

[Deleted User]

No. The earlier it's paid, the less interest is paid.

Front loading hasn't been legal for a decade.

biscuit1_2

Deleted_User said:

No. The earlier it's paid, the less interest is paid.

Front loading hasn't been legal for a decade.

Haha it's been a while since i had one

DCFC79

biscuit1_2 said:

Hi all just been having a chat with my son, just chit chat and we got onto the subject somehow of his car loan, as he seems to be paying a lot for his car, now i may be wrong but i thought there was a maximum rate that could be charged, and i have got usury in my head, he is being charged 39.4%. On a £5800 loan he is paying £12662 in total which at first glance to me looks higher than 39.4%. It's fair to say when he took the loan out 28 months ago his history was not good, but he needed a car, can anyone confirm if this rate is normal.
Cheers 

He had a choice of the car he bought and where he went for the loan but the  latter he might not have had much choice if it was the best rate he could get.

Im sure theres a calculator on the net you can use to work out the apr.

Clive_Woody

biscuit1_2 said:

Deleted_User said:

No. The earlier it's paid, the less interest is paid.

Front loading hasn't been legal for a decade.

Haha it's been a while since i had one

The APR (Annual Percentage Rate) is the amount of interest charged per year on the remaining balance, usually calculated daily, so the longer the term of the loan the more he will pay back.

Paying it off early will save him a lot of money.