Balanced payments

[taffyracer]

What rates have people been getting lately, what is achievable and what is considered a good deal?

[paoloh]

On a completely diff subject, warranty will get back to me tomorrow with price for you. Gone to underwriter.

[simon781]

When I was looking for a BMW recently, Lombard offered me balanced payments on around £35k for £530/month with a £5k deposit and a balloon of around £17.5k. That was over 36 months. Didn't have chance to see if they would do any better as my circumstances changed and the car was not needed.

[taffyracer]

i've been offered 2% above FHBR, seems pretty good?

[Egbert Nobacon]

taffyracer said:

i've been offered 2% above FHBR, seems pretty good?

With a balanced payments plan, or any other variable rate loan facility, its important to check how the interest is calculated and billed to the account.

You can have two agreements that appear identical, both showing say 2% over base, but in reality one is actually much higher.

The best deals are those that calculate the interest daily and charge/bill it to the agreement monthly as they immediately take into account each monthly payment as it is made.

The worst are those that calculate the interest charge on the opening balance each quarter and therefore the interest charged doesn't take into account any payments made during that quarter. These types of profiles are used to inflate the return to the lender by up to 0.5%.

Many people are unaware of this and only realise at the end of the agreement when they get an enourmous balancing charge to pay.

How to check :

1. Ask the question.
2. Check the agreement prior to signing -

Some agreements have a tick box, near where it states the rate over FHBR, and you need to ensure the right box is ticked.

Other companies have different agreements for different methods of interest calculation so if no tick box option exists then read the small print carefully.

Hope this helps

[taffyracer]

BMW BP is daily if i remember rightly