Ikano Financial Services

[UK26]

Partner took out a loan for the value of £558.00 for a Sofa at Harveys.

 

it was on a 12 month deferred payment.

if paid off in full within 12 months no interest would be charged.

 

we have made a total of 13 repayments at £28.82 per installment following the end of the 12 month deferred period,

i have requested a early settlement as i would like to clear the loan off for my partner to save interest.

 

We had the settlement of £576.39

 

I thought this was high considering we have paid a total of £374.66 off the loan already.

 

After speaking to Ikano Financial Services, they said the interest is charged from the date of the agreement being signed.

 

However, They refuse to accept that the credit agreement does not allow for this as it clearly states the following.

 

No payment is due for the first 12 months.

Interest is calculated on the amount of credit and applied from the first payment date.

if the amount of credit is repaid before that date, no interest will be payable

 

Ikano PRE-Contract credit information gives the following information

 

The total Amount of Credit £558.00

The Duration of the agreement: 36 Months

Repayments: 35 Monthly repayments of £28.82 and a one off payment of £28.50

 

Total amount repayable £1037.20

The rates of interest which apply to the credit agreement 26.4%

Annual APR 29.8%

 

- The Loan duration on the pre-contract states 36 months (3 years)

but the fixed sum loan agreement states 48 Months (4 Years)

 

 

Fixed-Sum Loan Agreement

Cash Price: 618.00

Deposit £60.00

Total Amount Repayable: £1037.20

Amount of Credit: £558.00

Total Interest Charged: £479.20

Duration: 48 Months

 

I would also like to know how they worked out the repayment amounts of £28.82 per month,

every loan calculator i have used on the internet does not agree with the above figures.

 

[ATTACH=CONFIG]50441[/ATTACH]

[dx100uk]

what you have done is gone with the 4yrs payment level [£28.82]

 

you should have been paying £46.50 PCM for 12mts

 

dx

[UK26]

this is not what i was on about.

 

1. The Pre-contract states 36 months

2. the fix-term loan states 48 months.

3. They are charging interest over 48 months not 36 as per the fix term loan agreement.

4. the repayment amounts of £28.82 with an APR of 29.8% on a loan amount of £558 do not add up correctly.

5. the early repayment figure given by the finance company does not add up correctly.

 

what you have done is gone with the 4yrs payment level [£28.82]

 

you should have been paying £46.50 PCM for 12mts

 

dx

 

Basically the loan says 12 month differed payment and Interest is calculated on the amount of credit and applied from the first payment date.

 

The loan was taken out in 2012 with the first payments starting in 2013, there has been a total of 13 payments now made.

 

My calculations suggest a settlement amount of £492.69 not £576.39 and the reason why theirs is higher as it contains an additional 12 months worth of interest.

 

if i am right in what i am saying and this makes all the calculations on the agreement incorrect, does this mean the actual agreement is not enforceable?

[UK26]

Lets assume the loan is over 36 months

 

APR 29.8 / 12 = 2.48 monthly

 

Loan Term 48 Months

 

Multiply £558.00 by the periodic interest rate of 2.48%. this gives a monthly repayment amount of £20.01 per month.

 

Figure the total interest that will be paid over the life of the loan

 

Multiply the payment by the number of periods in the loan, which, in this example, would be £20.01 x 36 = £720.36

 

Subtract the beginning principle amount of £558.00 from the total of all payments; £720.36 - £558.00 = £162.36 is the total interest paid on this loan.

Lets assume the loan is over 48 months but requires only 36 monthly payments

APR 29.8 / 12 = 2.48 monthly

 

Loan Term 48 Months

 

Multiply £558.00 by the periodic interest rate of 2.48%. this gives a monthly repayment amount of £23.61 per month.

 

Figure the total interest that will be paid over the life of the loan

 

Multiply the payment by the number of periods in the loan, which, in this example, would be £23.61 x 48 = £849.96

 

Subtract the beginning principle amount of £558.00 from the total of all payments; £849.96 - £558.00 = £291.96 is the total interest paid on this loan.

 

To me it seems Ikano have really messed up here.

 

I explained this to them and offered them a sum to clear the balance

to the value which is correct and they refused and said we must pay £576.39

 

worst case, if its confirmed the loan is for a term of 48 months and they can charge interest for the 48 months and not 36 as per the agreement.

 

then this still does not add up and ill explain why

 

Total interest of loan should be if over the full term should be £291.96,

 

loan as ran for 25 months so far leaving (£291.96 / 36 (Only 36 payments are required by the agreement) = £8.11 per month

 

of which 13 repayments have been made totaling £105.43,

 

Ikano say they can claim an extra month interest with early repayments so that is an extra £8.11

which gets added to the settlement sum

 

so to work out the settlement sum using the above figures £23.61 x 13 (Number of repayments) = £306.93

minus the interest of £105.43 leaves £201.50 paid off the the original amount which leaves £356.50 + £8.11 = £364.61

and this gives a settlement of £364.61

 

Total Repayable £671.54

[dx100uk]

Buy Now Pay Later (BNPL) Loan

- An interest bearing loan where you do not have to make your first repayment for an agreed period of time.

 

You have the option to fully settle your loan without incurring any interest within the deferred period.

 

If you choose to settle your loan after this period,

then any interest accrued since applying for your loan will be applied

[UK26]

it fails to say this within the agreement. like i say it says the interest is calculated and applied from the date of first payment

 

Buy Now Pay Later (BNPL) Loan

- An interest bearing loan where you do not have to make your first repayment for an agreed period of time.

 

You have the option to fully settle your loan without incurring any interest within the deferred period.

 

If you choose to settle your loan after this period,

then any interest accrued since applying for your loan will be applied

[dx100uk]

can you scan it up for me

 

be something to chew over and work it out

or not as you say:lol:

**you can post up images/letters by this method immediately..you don't need 10 posts**

.

set your default scan page size to A4 less than 300DPI [150 will do]

scan the required letters/agreements/sheets - as a picture[jpg] file

don't forget you can use a mobile phone or a digital camera too!!

'

BUT......

ENSURE: remove all pers info inc. barcodes etc

but leave all monetary figures and dates.

.

************************* ************************* *******

{DO NOT USE A BIRO OR PEN OR USE SEE THRU TAPE OR LABELS]

************************* ************************* ***********

.

DO IT IN MSPAINT.EXE or any photo editing program

goto one of the many free online pdf converter websites ...

http://freejpgtopdf.com/

http://www.convert-jpg-to-pdf.net/

..

if you have multiple scans/pics

put them in a word doc FIRST and convert that to PDF

or http://www.freepdfconvert.com/

or

use www.pdfmerge.com

 

convert existing PC files to PDF [office has an installable print to PDF option]

..

it would be better to upload a multipage pdf if

you have many images too rather than many single pdfs

.

or if you have PDF as an installed printer drive use that

or use word and save as pdf

try and logically name your file so people know what it is.

though DONT USE BANK NAMES or CAG in the title

i'e Default notice DD-mm-yyyy

.

open a new msg box here

hit go advanced below the msg box

hit manage attachments below that box

hit the add files button on the top right

hit select files, navigate to your file on your pc

hit upload files

...

YOU DONT have to put a link to the attachment in the msg box..just upload it ..job done

.

dx

[UK26]

will do this on Monday when at work as do not have scanner at home.

 

there is no dates on the agreement either both boxes are blank for the dates. this is the customer copy which we got on the day of ordering the goods.

[UK26]

here you go, took picture from phone

[dx100uk]

hey great job!

 

dx

[dx100uk]

that CCA is correct

 

35*28.82= +28.50 = 1037.20

 

you've paid 374.66

 

leaves 662.54

[UK26]

Yes i understand that the figures on the CCA add up correctly, however the argument i have is that the CCA does not allow them to charge interest from day 1. only from the first payment date.

 

not only this, using website loan calculators i am not able to arrive at the sums on the CCA.

 

that CCA is correct

 

35*28.82= +28.50 = 1037.20

 

you've paid 374.66

 

leaves 662.54

[BRIGADIER2JCS]

Yep it's a 4 year agreement with the first year payment free Not interest free.

[UK26]

what about Interest is calculated on the amount of credit and applied from the first payment date.

 

If interest does start from day 1, this was never explained to us.

Yep it's a 4 year agreement with the first year payment free Not interest free.

[BRIGADIER2JCS]

Of course it is. This is a 4 year contract with the FIRST YEAR PAYMENT FREE NOT INTEREST FREE! So the interest is payable from year 1 calculation is correct. This is a common misconception confusing Payment Free Years and Interest Free Years.

[UK26]

so this peace of text within the agreement is calculated on the amount of credit and applied from the first payment date. means nothing. I understood this to mean interest will start being applied from the first payment date.

[BRIGADIER2JCS]

That is correct the "total" interest is applied to the account on the date of the 1st payment and obviously includes the interest payable on the "payment free year".

 

 

The sentence " no payment is due in the first 12 months" clarifies, it does no say no interest is payable on the first 12 months.

[UK26]

[ATTACH=CONFIG]50449[/ATTACH]

that is really bad then. no one never explains this and i feel the Buy Now Pay Later products are misleading.

 

When you order products. its sold as (Pay nothing for 12 months and then start making payments after the 12 months at 29.8% APR) Also the pre-contract states a term of 36 months but the actual agreement states 48 months, again very misleading.

[BRIGADIER2JCS]

The term to repay all including the 1st years interest is 36 months, simply 1st year only payment free not interest free.

 

 

Misleading if not read in context I agree but totally correct in meaning.