T
Tea & Coffee
Guest
I took out a nerw loan in June for 4000, to close an old loan of approx 1800 and top up (well, pay off CC 
)
They forgot to close the old loan and put all the funds into my account. As I mainly bank online and it was Summer, I just spent away.... and was wondering why there were 2 different loan repayment amounts coming out of my account. On my online a/c, it showed an outstanding balance of 1300 (which I took to be the remaining balance on loan as I was ahem, doing such a great job with repayments) - I wouldnt be the greatest mathematical genius....
Anyway, I noticed (eventually) 2 payments were coming out a month. I called the bank and they admitted they forgot to close the old loan (but obv. it was my fault for frittering away the full amount sitting in my current a/c)
NOW: my question is this; as I don't underdtand interest at all.
They have offered to emalgemate the 2 loans: 1200 and 4000 at 5.7% over 5 years. She said it would cost a total of 6000 @ 115 per month repayments. How come it is so much? Is 800 the total interest over the term of the loan? And how come there is still 4000 remaining on the top up loan- surely my 6 months of payments should ahve reduced that amount- it wasnt an interest only loan...
My pal, who is a tax consultant, says I should ask them to calculate the new interest rate from the time the loan was taken out in June and take the loan over a shorter period, as even though they have reduced the rtate from 8.7% to 5.7%, I am saving nothing as it is over a longet term (was origianlly 2 years). I am so confused. I feel like I have been had in a way....
)They forgot to close the old loan and put all the funds into my account. As I mainly bank online and it was Summer, I just spent away....
and was wondering why there were 2 different loan repayment amounts coming out of my account. On my online a/c, it showed an outstanding balance of 1300 (which I took to be the remaining balance on loan as I was ahem, doing such a great job with repayments) - I wouldnt be the greatest mathematical genius....Anyway, I noticed (eventually) 2 payments were coming out a month. I called the bank and they admitted they forgot to close the old loan (but obv. it was my fault for frittering away the full amount sitting in my current a/c)
NOW: my question is this; as I don't underdtand interest at all.
They have offered to emalgemate the 2 loans: 1200 and 4000 at 5.7% over 5 years. She said it would cost a total of 6000 @ 115 per month repayments. How come it is so much? Is 800 the total interest over the term of the loan? And how come there is still 4000 remaining on the top up loan- surely my 6 months of payments should ahve reduced that amount- it wasnt an interest only loan...
My pal, who is a tax consultant, says I should ask them to calculate the new interest rate from the time the loan was taken out in June and take the loan over a shorter period, as even though they have reduced the rtate from 8.7% to 5.7%, I am saving nothing as it is over a longet term (was origianlly 2 years). I am so confused. I feel like I have been had in a way....