Car hp early settlement figure query

DrEskimo

Do the terms state you will be charged any early settlement fees? They can charge up to 2-months worth of interest.

foxy-stoat

They charge 2 months interest when they give you the settlement figure.  So when you paid your £286 your outstanding capital when down to £3714, add 2 months interest at 39.9% and that would be £247 extra = £3961 or there abouts.

James-may

foxy-stoat said:

They charge 2 months interest when they give you the settlement figure.  So when you paid your £286 your outstanding capital when down to £3714, add 2 months interest at 39.9% and that would be £247 extra = £3961 or there abouts.

Thanks, it doesn't actually say any of that in my agreement, it's a pdf so I can't copy paste, but basically it says I can settle early for cost of what's left in car plus any interest owed.
If it's a standard thing to charge 2 months interest, then fair enough.
That's why it's more than what I expected.
I asked this from the company when I phoned them and all I got was "you won't be able to work it out your self as it's too complicated".
Thanks for taking the time all.

DrEskimo

James-may said:

foxy-stoat said:

They charge 2 months interest when they give you the settlement figure.  So when you paid your £286 your outstanding capital when down to £3714, add 2 months interest at 39.9% and that would be £247 extra = £3961 or there abouts.

Thanks, it doesn't actually say any of that in my agreement, it's a pdf so I can't copy paste, but basically it says I can settle early for cost of what's left in car plus any interest owed.
If it's a standard thing to charge 2 months interest, then fair enough.
That's why it's more than what I expected.
I asked this from the company when I phoned them and all I got was "you won't be able to work it out your self as it's too complicated".
Thanks for taking the time all.

If it's not stated in your agreement I would challenge it.

As above, I get around £3,900, so ask them to provide a full breakdown for you.
Passing you off with a comment like that is not acceptable....

James-may

I'm going to call them this afternoon, and ask them to email and explain all the charges and fees and how they are getting their figures.
 got the money sitting here to pay, but even though you have all explained it, I'm not convinced lol.
I borrowed £3784 for car
£3267 in interest.
Divided by 49 that's £77 to car and £66 to interest each month.
So I've paid £154 off car.
So my car owed amount should be £3684.
The contract doesn't mention any fees or 2 months interest (which would be £132)
Which would only take my settlement to around £3800.
I looked up a bit and apparently they can't charge fees for loans under £8000.
I was hoping to sort this early this morning, but there call centres closed til 10.30am, the exact time I'm at work.
I know it's only £200-£300 but I'm puting every penny I have this month to get this cleared, so every penny counts.
Sorry if I'm seeking argumentative, I'm really not haha, just don't want to overpay anymore.

[Deleted User]

James-may said:

£3267 in interest.
Divided by 49 that's £77 to car and £66 to interest each month.

That's not how interest works.  Interest is charged on your outstanding balance.  

So in the first month, your interest was £123, and only a little less in the second month.  Over the three months you've had the loan, around £360 has been added to the capital in interest.

Your two payments have paid off about £40 off the opening capital. 

But if there's no ERC, they shouldn't be charging one.  But if there was an ERC, it would be around £240, not £132 as in your calculations.

James-may

Deleted_User said:

James-may said:

£3267 in interest.
Divided by 49 that's £77 to car and £66 to interest each month.

That's not how interest works.  Interest is charged on your outstanding balance.  

So in the first month, your interest was £123, and only a little less in the second month.  Over the three months you've had the loan, around £360 has been added to the capital in interest.

Your two payments have paid off about £40 off the opening capital. 

But if there's no ERC, they shouldn't be charging one.  But if there was an ERC, it would be around £240, not £132 as in your calculations.

Thanks, understand a bit more now, I'm going to ask them to show me how it's calculated, and if there's a etc,  where in my contract it is and what it says, as I can't find anything.

macman

To put it another way, your monthly payment is fixed at £143 but each month the proportion of interest drops and so the proportion of capital paid off rises. 
Next time, shop around for a better deal than 40% APR!

foxy-stoat

Just call them and make an overpayment, every day you are being charged about £4 interest.  They will only be able to charge you what the contract says anyway, they don't make stuff up along the way so whether you agree or don't agree, understand or don't understand, the charges are the charges.

James-may

Thanks all, all paid off now