Bamboo Loans early repayment figure

Declan1991

I took a loan of £3000 from Bamboo Loans over 60 Months in October 2020 at an APR of 69.9%, monthly repayments of £145.77. I know the APR is scandalous but at the time I was desperate and I always intended to repay early when it was possible.
I have today requested an early settlement figure and they have quoted £3098.18, so I have made 9 monthly payments totalling £1,311.93 yet I still owe more than I had originally borrowed, when I discussed this on the phone they just said they calculated it in line with the Consumer Credit Act etc etc.
I have had several loans in my time and have never heard of this sort of situation, I knew it was high interest but I expected that around £40-£50 of my payment would be chipping away at the capital and I was expecting my settlement figure to be closer to £2500.

I have tried to look through the original paperwork to find where they explained this would've been the case and asked them on phone to refer to where it was detailed but they just again referred to Consumer Credit Act.

Does anybody have any idea if I have any recourse regarding this to get a lower settlement figure or am I stuck with what seems like an unfair amount given I have made 9 monthly payments and haven't paid back a penny of capital.

Thanks in advance

SaverRate

Find an online loan calculator and enter your figures and see what it comes out with 

nick74

I've fed those figures into the loan amortisation calculator in Excel. I can't get to the exact repayments the OP quotes, it's coming out at £180.80 per month for me. However as an example at 69.9% and £180.80 pm you would only be repaying £6-9 of the capital per month in the first few months, and £170-£175 per month would have been going on interest. As the lender is allowed to charge you up to 58 days interest for early repayment then yes, at this point you will very likely owe more than you originally borrowed.

ratrace

£3,000 @ 69.9% = £2,097/12=£174 per month just in interest

so by paying £145 every month you were never paying the principal down hence the reason you own the same ammount 9 months later

https://www.themoneycalculator.com/loans/calculators/loan-overpayment-calculator/#!/dealfinder/loans/

ThisnotThat

ratrace said:

£3,000 @ 69.9% = £2,097/12=£174 per month just in interest

so by paying £145 every month you were never paying the principal down hence the reason you own the same ammount 9 months later

https://www.themoneycalculator.com/loans/calculators/loan-overpayment-calculator/#!/dealfinder/loans/

OP would owe a few hundred more than they're claiming if that were the case.  I can almost guarantee that isn't it.  OP has just got one or more of their figures wrong.

They've already been given the correct answer.  As the interest is so high and it's fairly early days in the repayment of the loan, little of the capital will have been paid off.  Stick two months interest on top and they owe more than they borrowed if they settle today.

TrickyDicky101

nick74 said:

I've fed those figures into the loan amortisation calculator in Excel. I can't get to the exact repayments the OP quotes, it's coming out at £180.80 per month for me. However as an example at 69.9% and £180.80 pm you would only be repaying £6-9 of the capital per month in the first few months, and £170-£175 per month would have been going on interest. As the lender is allowed to charge you up to 58 days interest for early repayment then yes, at this point you will very likely owe more than you originally borrowed.

You need to de-compound the APR:
=(1+69.9%)^(1/12)-1
to arrive at the periodic (monthly) rate of interest of 4.516%

If you slot that into the PMT function you derive the monthly amount on the loan:
=PMT(4.516%,60,3000)
=145.78

Or within a penny