Calculation of loan via Rule 78

[Maria47]

Good evening all,

Hope there will be some brain storming out there in relation to my issue, all feedback will be appreciated and helpful.

I took out a loan with Blemain in 2004 - 12 year term - £18,000 loan
I settled this loan in 2008. Well in all honesty and to be real, this loan was calculated via Rule 78, which I had no idea of it's drastic consequences.

The settlement details are as follows:
Amount outstanding under the agreement £26,128.74
Less Rebate £8,422.40
Redemption Fee £395.00
Legal & Doc fee's £680.00
Collection costs £105.00

Now I have been reading about Rule 78 being a extremely unfair calculation, which makes the loan the original amount taken out. The Rule was abolished in 2005 but I'm wondering if there is still a case to claim back the unfair charges. It's as if the loan was not even paid at all.

Anyone have any views and opinion on this, I would like to hear. Many thanks

[Guest]

Re: Calculation of loan via Rule 78

Was this a regulated agreement?

Peter

[Guest]

Re: Calculation of loan via Rule 78

HI
This calculator gives a figure for the settlement amount using the early settlement regs.

May give some idea of the difference pre and post 2005

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

[Maria47]

Re: Calculation of loan via Rule 78

Hi Peter,
Well they stated that was and also stated that loans with terms over 10 years (this one was 12) may still
still be redeemed using Rule 78. But i thought this ruling was abolished in 2005, which will mean no redemption's could be calculated using this method after 2005.

[enaid]

Re: Calculation of loan via Rule 78

Hi Maria,
I got your pm and am sorry that you feel you have been ignored, I see that is not the case now as Peter has replied and he will help you if he can.
If you use the calculator he has given a link to then you can see what the difference would be.

[Guest]

Re: Calculation of loan via Rule 78

The transitional agreements are

10.—(1) The Regulations referred to in regulation 8 continue to apply, in place of
regulations 1-7 of these Regulations, and the amendments in regulation 9 do not apply, in the
case of a regulated consumer credit agreement entered into before the date on which these
Regulations come into force—
(a) until 31st May 2007, if the agreement is for a term of 10 years or less;
(b) until 31st May 2010, if the agreement is for a term of more than 10 years.
(2) For the purposes of paragraph (1), the term of an agreement is the term originally
provided for, or, in the case where the term was varied before the date on which these
Regulations are made, the term provided for on that date.

So if the agreement was made after 2005 the new rules would apply but, if the agreement was already running and over ten years in length the old rules wold apply until May 2010.

However it is worth working out the difference between the two figures as section 140 may apply

Peter

[Turboman]

Re: Calculation of loan via Rule 78

Hi Maria

Afraid I've been occupied elsewhere for a good while organizing "Meets"
--back to day job now-lol

Re calculation of the Settlement-Rule of 78--me & Marshallka got experience in this in calculating the figures
We use Stewarts site who was advisor to the OFT (since passed away unfortunately)--
http://brian-stewart.orpheusweb.co.u...ualr78-prr.htm

(Peter better than me re if Rule of 78 actually applicable in your case)

However--we aint got enough info from you Maria to really comment on post 1--we need to Amortize your loan and compare it with your statements/actual payments made

We really need

• Loan Amount
• Date taken out
• Date of First Payment
• Number of Payments made + Amounts
• APR at outset + Mthly Payment at outset
• APR now + Monthly Payment
• A copy of the terms as on your CCA-detailing early settlement
• A copy of the latest statements -Page 1 & Last page
• A copy of the settlement letter
• An outstanding balance from last statement prior to rebates etc
• Details of any missed payments/arrears which would attract interest and therefore increase the balance outstanding

Generally speaking---you would (with Halifax & First Plus as an example) for your settlement figure to be the true oustanding balance + around 1-3 months extra interst--indeed-Rule of 78 adds around 2 months I think

See here btw--ignore the mention of PPI-Principles apply to all loans
http://www.legalbeagles.info/forums/...n-Amortization

Turbs

[Maria47]

Re: Calculation of loan via Rule 78

Thanks very much for your responses, I will definately have to keep chipping away at this one. I will also try and use the calculation link.
'section 140 may apply' not sure what this is. I will just have to continue. I might get some documents together as suggested by Turboman so a proper assessment can be made

[Guest]

Re: Calculation of loan via Rule 78

Section 140 is a newish regulation that protects the consumer from anything done by the creditor that is considered unfair.
Look up CCA 2006 section 140

Peter

[Turboman]

Re: Calculation of loan via Rule 78

Maria

You say that you took a loan out of £18,000----was there a Single Premium Loan for PPI IN ADDITION to the £18,000 (see your CCA)

Just exploring all scenarios-

Turbs

[Maria47]

Re: Calculation of loan via Rule 78

Hi there, thank you for your responses, no PPI was taken out with this loan, well at least I did not consent to it and there does not seem to be any info in that regard on the paper work.