Hellom

I took out a loan 21 months ago. £4,000 over 5 years for a scooter 22.9% interest I pay 105.00 per month. I asked them today for a settlement figure. They said I owed 3,400. I have paid 2205 but only 600.00 has been paid off my account, dos that sound correct. I can't make head nor tails of APR's etc etc,. Thank you

Hi

it may be because they have added a settlement fee on top as you have paid off early. a similair thing happened with me with Freedom Finance, and when i checked it was because of an early settlement fee. i thought serves me right for not reading the small print.

It maybe that your loan company did that sneaky trick (that too many of them do - and should in my opinion be illegal) of calculating the entire amount of interest over the full period of the loan and then loading it all on the front end of the loan. So for the first chunk of the loan you end up paying the interest.

If you then want to complete the loan early you end up paying interest on the whole loan and not just the time when you had their money.

Ethically you should only have to pay interest on the capital remaining of your loan - but then who ever accused loan companies of being ethical???

Yorkshire Lad