Loan Balance is alot less than expected

[scully]

Loan i took out was 5000, not sure of the rate, but it worked out that i would pay back 129.94 over 48 months. Which in total is 6237.12

It is a new loan and have made 3 monthly payments of 129.94 so far which should bring the loan balance to 5,847.30

When i spoke to GE they told me that the balance was 4824.07 to be exact.

I dont understand this, and i wasnt clear on what they were telling me.

Can anyone help me understand this better, was it a mistake etc

 

[scully]

ooops with payment protection its around 152 - so thats a total of 1012 left with 44 months.
1,012.00
5,847.30
--------
6,859.30 This is what i thought i owed

but even at that if GE are saying i have a balance of
4,824.07
1,012.00
--------
5,836.07 then this must be what i owe according to GE

or am i wrong.

It was a variable loan also, if that makes sense.

 

[dam099]

Loan i took out was 5000, not sure of the rate, but it worked out that i would pay back 129.94 over 48 months. Which in total is 6237.12

It is a new loan and have made 3 monthly payments of 129.94 so far which should bring the loan balance to 5,847.30

When i spoke to GE they told me that the balance was 4824.07 to be exact.

I dont understand this, and i wasnt clear on what they were telling me.

Can anyone help me understand this better, was it a mistake etc

The total interest is not added to your loan balance at the start. It is probably added monthly so your monthly payment pays off the interest for that month plus some of the capital. At the start of the loan you will be paying more in interest with a small element of capital with the situation gradually reversing over the course of the 48 months so that at the end you will be paying more capital with a small bit of interest.

 

[scully]

but there is still a large gap of 1000 thereabouts. Surely my 3 152 payments couldnt reduce interest that much.

Sorry for the questions, im just very confused.

 

[demoivre]

but there is still a large gap of 1000 thereabouts. Surely my 3 152 payments couldnt reduce interest that much.

Sorry for the questions, im just very confused.

The numbers seem reasonable to me. You borrowed 5k, you made three 152 euro payments and your settlement figure is now 4824.07 . As dam says the interest isn't loaded on day one ! You also say today that it's a variable rate loan so you wouldn't have interest penalties. (By the way yesterday you gave different repayment numbers on the 5k loan and the info. that you gave suggested it was a fixed rate loan - apologies in advance if that's a different loan you are talking about)

 

[scully]

The numbers seem reasonable to me. You borrowed 5k, you made three 152 euro payments and your settlement figure is now 4824.07 . As dam says the interest isn't loaded on day one ! You also say today that it's a variable rate loan so you wouldn't have interest penalties. (By the way yesterday you gave different repayment numbers on the 5k loan and the info. that you gave suggested it was a fixed rate loan - apologies in advance if that's a different loan you are talking about)

No your right, it was the same loan. But i forgot to add in the payment protection amount.
Yesterday I thought it was 155 a month inc protection, but when i spoke to GE today its exactly 152, 129.94 without.

In order to fully pay quicker, i have asked to cancel the payment protection, which the intention I will be staying on at work for at least 6 months, that will give me plenty of time to finish off paying the loan, which is what i wanted all along.
I was confused yesterday cause i thought if i pay back lump sums every week of around 200 no interest would be deducted as i thought it was a fixed loan.