Mickle

Please help

If I were to take out a £15k loan as an example @ 6% APR and it had no early repayment clause etc and I had the loan for 2 months what would I be charged for that loan?

Am I right in thinking it's the £15k + 2 months interest?

Spoon

The repayments will be structured to chip away at the 15k,(capital and interest), so after 2 months of repayments you won't owe 15k but it will be slightly less.

Example: 15k + 30% (6% x 5 years) = £19,500.

£19,500 divided by 60 months (5 years) = £325/month.

2 x £325 = £650.

£15,000 - £650 = £14,350 to clear after 2 months payments.

Mickle

Thanks spoon, that helps alot

imlach

(edited as saw you mentioned you had no early repayment clause)

imlach

PS Spoon...your example is slightly wrong. In the early days of the loan, you're paying mostly interest....in the latter days, mostly capital. It's not quite as simple as £325/month being taken off the amount due each month.

ie, the interest each month on the loan at the start is probably 6% OF 1/12 of £15000. ie, £75 interest for first month, slowly decreasing over the months. This means your capital repayment each month is £75 less than what you pay to them.

Near the end of the loan, your capital will be down to a few £k, which (if it was £2k) would be 6% of 1/12 of £2000. ie, £10 interest each month in latter months of loan. This means your capital repayment each month is only £10 less than what you pay to them.


etc etc

fast bloke

what is either the term and the monthly payment. It is fairly easy to work it out from there.

Mickle

The loan I was looking at was 5.7% borrowing £16000 over 3 years but was only getting it as a temporary thing (1 - 3 months) until I can sell my car. They have no early repayment penalties

Sub97

Why dont you stick it on a couple of interest free credit cards for a few months? Most of them give you 9 months interest free period now - costs you nothing that way.

Spoon

Well if you wanted a fúcker off me it would be that simple.