Interested in APR and fees and how they effect agreement unenforceability

[gh2008]

Hi

 

According to the prescribed terms and confirmed by Peter, as I took out a loan, the rate of interest isn't required in my case. Peter also reckoned I could possibly challenge if the interest has been incorrectly calculated however your calculation indicates the interest charged is pretty much correct.

 

Peter's right again

been spending too much time on credit cards recently lol

[cab1ne]

APR is spot on - Interest rate is waaaaaaaay off

need to double & triple check but currently I'm gettin 12.5% nominal annual and 13.2% effective annual

 

which one is the important one

 

cab

[socleirigh]

Hi gh2008

 

I was wondering if you could work out the figures for this personal loan

 

Amount of credit £20,000

1st monthly payment £447.50 (included arrangement fee of £50)

then 59 payments of £397.50

Interest £3,850

 

 

 

Interest is stated as 3.85% pa

APR is stated as 7.5%

 

Total payable £23,900

 

I can't work out if the interest and APR are correctly stated. Any help would be appreciated.

[frettful38]

Hi gh2008

 

I was wondering if you could work out the figures for this personal loan

 

Amount of credit £20,000

1st monthly payment £447.50 (included arrangement fee of £50)

then 59 payments of £397.50

Interest £3,850

 

 

 

Interest is stated as 3.85% pa

APR is stated as 7.5%

 

Total payable £23,900

 

I can't work out if the interest and APR are correctly stated. Any help would be appreciated.

 

Is it possible you can scan up your loan agreement deleting any personal details?

[socleirigh]

I'm in work at the minute, but will get the agreement over the weekend and post on Monday (no internet access at home)

 

Thanks

socleirigh

[gh2008]

Amount of credit £20,000

1st monthly payment £447.50 (included arrangement fee of £50)

then 59 payments of £397.50

Interest £3,850

 

Interest is stated as 3.85% pa

APR is stated as 7.5%

 

Total payable £23,900

 

Apr is spot on interest rate is ridiculously out it should be 7.40% from my calcs

[cab1ne]

Hi GH

 

would this be a an advantage or a disadvantage to me:confused:

 

cab

[mystery1]

Hey guys, can anybody check the apr and interest rate for me please as the statements have a different rate.

 

 

Cheers

 

M1

[socleirigh]

Is it possible you can scan up your loan agreement deleting any personal details?

 

Hi,

 

Have been trying to use photobucket to upload a copy, but having problems. Will keep trying.

 

Thanks

socleirigh

[socleirigh]

Hi gh2008

 

Thanks a million for looking at the figures. I thought the 3.85% pa looked a bit strange.

 

Thanks

socleirigh

[cab1ne]

with the tolerence levels on APR being 0.1% below and 1% above, what amounts are these levels set on.

 

1. total amount payable?

2. total amount of credit?

3. or

 

cab

[gh2008]

Only the APR as it is a calculated figure and not a figure used for the actual interest calculations

 

The other figures should be exact although small error will be seen as not prejudicing either side and will be dismissed as de-minimus issues

[socleirigh]

Is it possible you can scan up your loan agreement deleting any personal details?

 

Hi frettfull38

 

Sorry for taking so long to get the agreement scanned in response to your post29. Hopefully the attachments below will work

 

BOI CCA.pdf

 

BOI CCA 1.pdf

 

BOI CCA 2.pdf

 

I understand that the APR is correct, but the interest quoted as 3.85 per annum is incorrect. Although interest is not a prescribed term for fixed-sum loans, could it be regarded as a breach if any interest in the agreement is incorrectly stated?

 

Kind Regards

socleirigh

[enslaved]

TOTAL CHARGE for CREDIT consists of any monies that you contractually agreed to pay in order to procure the loan. It Includes;

 

• The interest charged on the loan
  
• Any setting up fees charged by the creditor
  
• Any insurance that was conditional on you getting the loan (if you didn’t buy they wouldn’t give you the loan)
  
• The final purchase element on a hire purchase agreement
  
• Any brokerage charges
  
• Any attached agreements necessary to the purchase of the loan
  

(An exhaustive list of charges that should be included in the TCC are contained in the TCC regulations 1980)

 

We have seen that that he interest rate is calculated using the total credit and the amount of interest .

 

The APR. is calculated by using the total credit and the (amount of interest + all the compulsory charges (or the TCC) ).

 

The Regulations and Total Charge for Credit

Section 9(4) of the Consumer Credit Act 1974 says

“For the purposes of this Act, an item entering into the total charge for credit shall not be treated as credit even though time is allowed for its payment.”

Section 20 enables the secretary of state to define “what items are to be treated as entering into the total charge for credit, and how their amount is to be ascertained;”.

This he does in the statutory instrument, Total Charge for Credit Regulations.

posted by peterbard

 

Hi

Does this mean if;

broker fees

commissions

override payments

Are 'secret' that they are not identified on the loan anywhere, the APR is wrong?

 

Many Thanks

[frettful38]

TOTAL CHARGE for CREDIT consists of any monies that you contractually agreed to pay in order to procure the loan. It Includes;

 

• The interest charged on the loan
  
• Any setting up fees charged by the creditor
  
• Any insurance that was conditional on you getting the loan (if you didn’t buy they wouldn’t give you the loan)
  
• The final purchase element on a hire purchase agreement
  
• Any brokerage charges
  
• Any attached agreements necessary to the purchase of the loan
  

(An exhaustive list of charges that should be included in the TCC are contained in the TCC regulations 1980)

 

We have seen that that he interest rate is calculated using the total credit and the amount of interest .

 

The APR. is calculated by using the total credit and the (amount of interest + all the compulsory charges (or the TCC) ).

 

The Regulations and Total Charge for Credit

Section 9(4) of the Consumer Credit Act 1974 says

“For the purposes of this Act, an item entering into the total charge for credit shall not be treated as credit even though time is allowed for its payment.”

Section 20 enables the secretary of state to define “what items are to be treated as entering into the total charge for credit, and how their amount is to be ascertained;”.

This he does in the statutory instrument, Total Charge for Credit Regulations.

posted by peterbard

 

Hi

Does this mean if;

broker fees

commissions

override payments

Are 'secret' that they are not identified on the loan anywhere, the APR is wrong?

 

Many Thanks

 

Very good question enslaved, but does the above apply to agreements of £25k and below or not? and if these things are entered in to the total charge for credit then would that make the loan unenforceable? Where do we find out for 100% sure, and does this apply to any agreement?

[enslaved]

Hi Fretful

 

Yes, my agreement which is covered by the CCA 1974 and secured on my property (wave goodbye, already gone).

Secret commissions, broker fee and override payment, not declared, not itemised, no 'may pay brokers', no 'may take commissions', narda, bugger all.

Rest unknown, seek advice like yourself.

p.s. What is an override payment?

 

Many Thanks

[frettful38]

Hi

 

Yes although the APR is not a prescribed term it is srill a breach if it is outice the peramiters set in the regs.

 

It is after all the main indicator of the value of the loan or hhow good the bargain was. The court will rule against the creditor in most csses if he has missled you in your transaction by giving a false APR.

Also the APR total charge for credit are all mathematically linked so an incorrect apr may indicate that a fee is in the total credit when it should not be so the whoe agreement really needs to be properly evaluated.

 

Peter

 

This is a question for peterbard as I believe he will have a better understanding of working what I am trying to. My question is that if the interest rate on my unregulated loan agreement is different to the one my lender has showed on my loan statement then what does the law say to that?

 

I believe that my lender has written a different interest rate to the one stated on my loan agreement. I have highlighted just the paragraph on my loan agreement which shows the interest rate, and I have attached my loan statement which was in my subject access request I received from my lender.

 

If you read paragraph "I" it states that interest at discount will be 7.80%

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/Blemainagreement-1.jpg

 

and if you read loan statement interest rate is shown as 9.80% funding rate and 9.80% current full rate

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/blemainloanstatementinterest-1.jpg

[Peterbard]

This is a question for peterbard as I believe he will have a better understanding of working what I am trying to. My question is that if the interest rate on my unregulated loan agreement is different to the one my lender has showed on my loan statement then what does the law say to that?

 

I believe that my lender has written a different interest rate to the one stated on my loan agreement. I have highlighted just the paragraph on my loan agreement which shows the interest rate, and I have attached my loan statement which was in my subject access request I received from my lender.

 

If you read paragraph "I" it states that interest at discount will be 7.80%

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/Blemainagreement-1.jpg

 

and if you read loan statement interest rate is shown as 9.80% funding rate and 9.80% current full rate

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/blemainloanstatementinterest-1.jpg

 

 

Hi

 

I will have to have a think about this and do a few sums i will get back to you, why would you say this was unregulated? is this still active?

 

Peter

[frettful38]

bump

[means2anend]

subbed!!!

[means2anend]

Peterbard..

 

.As this is your thread...and BECAUSE for the life of me I am MORE confused NOW than when I read this thread...could you somehow for my sake bring the analysis and take me through this step by step to a level a ten year old wolud be able to understand cos' I just cannot grasp it...I get mental blocks for some things that I cant understand ....AND believe me THIS i cannot understand.

 

I should very much appreciuate if you were to explain the whole concept in much simpler terms.

 

As long as at the end of the day we lesser mortals are able to grasp this you will have succeeded.

 

I really fall in calculating the APR more than anything but should like you to go through it again.

 

Much (mentally exhausted) thanks!

Edited February 25, 2010 by means2anend

[frettful38]

Hi

 

I will have to have a think about this and do a few sums i will get back to you, why would you say this was unregulated? is this still active?

 

Peter

 

Hi peter, I know my agreement is unregulated because it is over £25k and was taken out in Oct 07. I will wait for you to get back to me when you have done the sums. Thank you, and yes it is still active

[socleirigh]

Hi frettfull38

 

Sorry for taking so long to get the agreement scanned in response to your post29. Hopefully the attachments below will work

 

[ATTACH]16505[/ATTACH]

 

[ATTACH]16506[/ATTACH]

 

[ATTACH]16507[/ATTACH]

 

I understand that the APR is correct, but the interest quoted as 3.85 per annum is incorrect. Although interest is not a prescribed term for fixed-sum loans, could it be regarded as a breach if any interest in the agreement is incorrectly stated?

 

Kind Regards

socleirigh

 

Hi

 

I was wondering if anyone has had a chance to look at my agreement above. The APR is correct, but the interest rate is wrong. What effect, if any, would this have on unenforceability?

 

Kind regards

socleirigh

[frettful38]

Hi

 

I will have to have a think about this and do a few sums i will get back to you, why would you say this was unregulated? is this still active?

 

Peter

 

Hi peter, you never got back too me, just a bump. Thanks

[paulwlton]

Peterbard..

 

.As this is your thread...and BECAUSE for the life of me I am MORE confused NOW than when I read this thread...could you somehow for my sake bring the analysis and take me through this step by step to a level a ten year old wolud be able to understand cos' I just cannot grasp it...I get mental blocks for some things that I cant understand ....AND believe me THIS i cannot understand.

 

I should very much appreciuate if you were to explain the whole concept in much simpler terms.

 

As long as at the end of the day we lesser mortals are able to grasp this you will have succeeded.

 

I really fall in calculating the APR more than anything but should like you to go through it again.

 

Much (mentally exhausted) thanks!

 

There are APR and interest calculators on the net.

 

An out of tolerance APR is a breach of schedule 1 1983 regs which isn't a fatal breach for the purpose of 127(3). However, an APR so out of tolerance that its intention is to mislead is an offence.

 

The Interest rate on a variable rate loan is a prescribed term and CANNOT be slightly misstated, there are no de-minimus issues in relation to a prescribed term.