Front Loaded Novuna personal Finance

steveide

June 2021 I borrowed £36000 with 1year deferred payment, I have since paid £556.34/month for 22 months (12000)
The settlement April 2024 was 

£35,920.31

 How can this be legal? means I only paid £80.00 of the original loan in 22 months

Novuna Personal Finance
Agreement number
(Removed by Forum Team)

TrickyDicky101

What's the interest rate on the loan?  The 1 year deferral period almost certainly didn't mean you didn't get charged interest for the period (you'd need to check your docs/what you signed up to) so dependent on the interest rate that could have added significantly to your outstanding balance by the time you started to actually make repayments.

cymruchris

As above - what was the interest rate you signed up to? and over how long (beyond the deferred period).

It's likely that each month you weren't paying, interest would have been added to the outstanding balance, so you didn't start paying it down until month 13.

Ayr_Rage

@steveide suggest you remove that agreement number asap

Novuna look to be a normal regulated company so yes, it will be legal but you have likely misunderstood how the loan is structured.

Nasqueron

Front loading interest is banned, you can ask them for a calculation of the figures but it will be correct

martinbainbridge1975

Novuna used to be Hitachi Finance , the interest rate on that loan must be shocking

lordmountararat

Sadly some people expect deferred payment loans not to accrue interest during the deferred term. Of course, they do and the interest racks up quickly when no payments are being made. Even when you do start making payments, most of it is interest in the first years with the principal increasingly being paid off in the last years. You will see the amount you owe fall dramatically as the contract nears its end. It won't be front loaded - that has been banned for many years.