How to record Balance on Spreadsheet

Lifestartsat40

Hi All - I recently took out an £18,000 loan with Tesco Bank over 7 years. 
I have logged on today to see that the balance I owe is circa £27k. I understand that this is because they have added all the interest on at the start - obviously if I were to (fingers crossed) win the lotto tomorrow and pay the loan back in full then I would presumably owe a fraction under £18k (original loan plus couple of repayments made) as they would rebate the interest? 
My question is - When doing a spreadsheet of my debts - would you record this as owing £27k? When I have had other loans in the past they have added the interest on monthly and then taken the payment off at the same time so I could at least see the balance reducing. 
Its a bit demoralising to see such a large balance tbh. 

mcpitman

I would record this as an 18k debt.

If you ask for a settlement figure the figure would be closer to the 18k, as you would only pay interest for the period the money as borrowed.

The 27k figure is all payments and interest accrued over the 7 year term. What is the APR c7/8%?

It's a large chink of cash over a long repayment period. If they allow overpayments on the loan I would suggest you do that as soon as possible, to either shorten the term or lower the monthly payments.

Lifestartsat40

Thank you McPitman 
The APR is 13.8% 
The plan is  definitely to make overpayments - They say this will automatically shorten the term unless I request that it lowers the payments. 
Im also wondering how they will adjust the interest for any overpayments made? 

mcpitman

For the Excel sheet I would populate a requested settlement figure every 12 months as an update. (Start = 18k, Year 1 = 15/16k etc). I measure my debts as if I were to settle them all on that day what would I need to pay. (like you would a mortgage, you would think of it as a 100k debt, not the £150k repayable at full mortgage terms).

Payments of about £335 p.m?

I'd get them to about £450 p/m asap.

Interest amount in £'s is adjusted every time you make an overpayment with NW I believe. (or at least it is with my mortgage).

Question - in true MSE style, have you solved the issue that created the 18k debt? (was it consolidation, home improvement etc). If you have other debts at higher APR's than this loan, you may be best overpaying on those first.

Lifestartsat40

This is the highest APR of all my debts and it was a thought through decision. Probably not a wise decision but something we have been looking to purchase for sometime and my husband couldn't wait until we had saved up the full amount 
Payments are £327 per month at the minute
I am currently throwing all spare money 3 ways at present  - Topping up EF/Towards this loan/to fund Xmas 

Lifestartsat40

I think I will record the starting debt at 18k then divide the total interest over the 84 payments which means I am effectively repaying £214.28 off the debt each month from my £327 payment 
I will add in any overpayments ignoring the impact they have on interest
Then I will get a settlement figure each year and adjust the spreadsheet accordingly  

ratrace

With my tesco loan i just put the full ammount in to my excell spreadsheet as thats truly what i need to pay, there is no point in trying manipulate the figures to make me feel better the reality is thats what i own them, i do make overpaymets from time to time but things get in the way and other things crop up that need to be paid, mine is 12.5% which is a horrible rate my last tesco loan was 3.5% a few years ago. any overpayments i make i call them i never do it over the internet banking as i want the payment to reduce not the term as its only 24 payments left

i would personally just put 27k because thats what you own as you make overpayments that figure will reduce as the overpaymets will be going direct to the principale, i know seeing that figure can be a bit of a shocker but it will motivate you in paying it off as fast as possible as it does for me

Hope that helps