Should a Passport ever be given for a loan?

Robert_Sterling_3

Taking the repayments to be the same amount each week and the interest to be the same each week the interest rate is 71% in week 13 only when the remaining outstanding capital is £77 and the interest charged is £33.

This is one way of looking at the loan.

Another way is the actuarial way.

A third way is the rule of 78 way.

grumbler

Robert_Sterling wrote:

This is one way of looking at the loan.

Very strange way ...

Another way is the actuarial way

Actuarial means based on statistics. What this has to do with loans?

A third way is the rule of 78 way.

Rule of 78 is anachronistic formula to calculate a rebate of finance charges when a customer pays off a loan early. Not all lenders use it. What it has to do with looking at the loan?
:mad:

Rafter

I don't think the passport is being used as security as such - more that this person doesn't leave the country.

However, the loan is extortionate and would probably be thrown out by a court.

Your friends should go see citizens advice and see whether a credit union or similar will help them out.

If they can seriously afford the £132 a week they may have to continue with it and just never take out a similar loan again in the future.

R.