Terms and conditions of loan

F

Fionn

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I have 21 months of a 48 month load repaid. I'm thinking now of paying off the loan in full.

At the time, I did not look at the terms and conditions. All I was concerned with was the amount borrowed and the monthly repayments.

Looking at the agreement now, there are a couple of things I don't understand. I probably just don't understand the concepts. Maybe somebody might shed some light on these for me.

Under the section CREDIT AGREEMENT it states the APR is 5.67%. On the same page further down under the section FINANCIAL DETAILS it states "interest rate of 2.87% per annum".

Both sections state amount of credit 33992, cost of credit 3964.13, total repayable 37956.13.

Why the two different interest rates?
Is the cost of credit stated not around 11%?

Someone show me the blindingly obvious!

Thanks.
 
Fionn said:
Under the section CREDIT AGREEMENT it states the APR is 5.67%. On the same page further down under the section FINANCIAL DETAILS it states "interest rate of 2.87% per annum".
Click to expand...
It is possible to have one nominal rate and another APR in which case the latter is the better measure of the cost of credit because it factors in all charges etc.
Both sections state amount of credit 33992, cost of credit 3964.13, total repayable 37956.13.

Why the two different interest rates?
Is the cost of credit stated not around 11%?
Click to expand...
The total cost of the credit is c. 11.66% over the 4 years would seem to be 11.66%.
 
I see. At 2.7% there wouldn't be much point in clearing this early then, given current rates? I need some cash. Was going to clear this (repayments are high) and take out a new loan, or alternatively draw on savings.
 
Sorry, you've lost me. :eek: Which one is it? Looking at the cost of the credit and the total amount repayable the, 2.87 and the 11. look more right. What is the 5.67?
 
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