How to calculate settlement figure

[AndyADH]

Just as a quick calculation if you have been paying for exactly 4 years then you would now owe 17,455.72.

That is unless I made a mistake, which is known to happen now and again.

I would get a second opinion though and also exactly how many months have you been paying? It seems a lot but I guess because the majority you pay for the first few years is interest they really get your money out of you.

Hope this helps

[timskipper]

ScuttleRX said:

25k over 10 years (£311 a month)

:shocked: that's some interest rate!

ETA: There's a built in MS Excel function for working this out I believe - I'll see if I can find it later if nobody else has come up with the answer.

Edited by timskipper on Thursday 28th February 16:22

[mcflurry]

Assuming its interest rate is set at 8.5% and the loan started on the 1/1/04 I make it around £17k

Disclaimer - This was done on a piece of paper, so may not be 100% accurate etc etc

[Egbert Nobacon]

Google the "Rule of 78"

[mogul]

Egbert Nobacon said:

Google the "Rule of 78"

[AndyADH]

mcflurry said:

Assuming its interest rate is set at 8.5% and the loan started on the 1/1/04 I make it around £17k

Disclaimer - This was done on a piece of paper, so may not be 100% accurate etc etc

Good someone gets the same as me. I was in a rush this morning when I calculated it.

I based it on 8.578% interest.

So if you have paid for
4 years then you will still owe. 17,455.72
4.5 years then you will still owe. 16,318.18
5 years then you will still owe. 15,130.98

Hope this helps

[AndyADH]

I was cheating and pluging the numbers into a calculator :-)

Its easier than working it out manually and quicker.

Alternatively Excel works well

[Piglet]

AndyADH said:

Alternatively Excel works well

Can you explain how to do this in Excel? Is there a specific formula?

I'm always puzzed by settlement figures and have tried to understand the whole 78's thing but my absolute stupidity with numbers makes it difficult.

Cheers

[mogul]

Piglet said:

AndyADH said:

Alternatively Excel works well

Can you explain how to do this in Excel? Is there a specific formula?

I'm always puzzed by settlement figures and have tried to understand the whole 78's thing but my absolute stupidity with numbers makes it difficult.

Cheers

You're not stupid, the rule of 78 was designed to make life as difficult as it can be to calculate a settlement figure!

[timskipper]

I think the formula you want in Excel is PPMT()

[smartie]

I thought loans under £25K were settled on a 2 months interest basis rather than rule of 78?

[mcflurry]

smartie said:

I thought loans under £25K were settled on a 2 months interest basis rather than rule of 78?

AFAIK it only applies to new loans taken out in the last year or so