Front Loaded Loan

[Ready2Run]

Hi


Just a quick and I hope simple question.

Where does a loan agreement stand where the interest is "Front Loaded" but there is no mention of such in the agreement.


Reason for asking is that I have been asked to pay £18,861 for a £10,000 loan as I could not make the payments due to redundancy.


If the loan company decided to go for a CCJ I would hope that they did not ask for interest added as well as this would be interest added to interest


Thank you all in advance

[Guest]

Re: Front Loaded Loan

Hi
If the agreement is terminated due to default the total due under the contract would be payable principle+interst+charges less what you had already paid.

However if the debtor tried to settle early the settlement figure would be calculated by using the early settlement regulaions, which bassically ensures that you only pay interest at the contractural rate for the period you had the loan+fees and charges.

Peter

[Bill-K]

Re: Front Loaded Loan

Hi R2R. I think Peter's correct in saying that if you default, then the lender can pursue you for the whole debt - including the interest they expected to be paid on that debt. This could be challenged in court, of course, but any lower settlement would probably have to be at the discretion of the Judge and the lender. You could at least 'plead poverty,' and offer to repay the debt at £1 per month for ever - secure in the knowledge that no more interest will be added to it.

However, your point that the interest is NOT mentioned in the loan agreement is interesting, as I believe it should be if the the loan is a CCA-regulated loan. Can you scan and post a copy of the agreement ? Please blank out personal details, etc.

[Guest]

Re: Front Loaded Loan

Hi
If this was a fixed sum loan before May 2005 with no facility to vary the interest then the interst rate does not have to be shown.

Prescribed terms are total credit and repayment ammounts and intervals.

APR should be shown but it is only a required term

Peter

[Ready2Run]

Re: Front Loaded Loan

Hi everyone

many thanks for the replies. The loan was post 2005 and is covered by the CCA.

I will scan and post the agreement once I have managed to get my removal boxes cleared as I have recently moved away from the UK but it may be a little while due to some as yet not arrived at my new home

[CleverClogs]

Re: Front Loaded Loan

many thanks for the replies. The loan was post 2005 and is covered by the CCA.

I will scan and post the agreement once I have managed to get my removal boxes cleared as I have recently moved away from the UK but it may be a little while due to some as yet not arrived at my new home

If you have emigrated, why the buggery are you bothered about what a creditor might or might not do?

[Ready2Run]

Re: Front Loaded Loan

Part of the entry to where I have gone was an agreement to pay off all my debts. Failure to do so will mean being deported and no chance of a return until all paid. I have not run into Europe where anyone can go anywhere thre are strict entry regimes around the SE Asia and the Oriental areas of this world

[Guest]

Re: Front Loaded Loan

Hi
I hve found thisto be an accurate early settltment calc

http://www.financecalcs.co.uk/Calcs/Settlement.php