Family & Relationships0 min ago
Csl
3 Answers
Eighteen years ago my partner had a small business loan of £3,000 then he got divorced and has since been paying CSL (Credit Security Limited) £15 per month to pay this amount off. He was told 07/june/`17 he has 1,480.00 left. I am no good at sums; would anyone out there say this is correct please? Thank you.
Answers
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CSL don't apply any charges or interest to people's accounts. However their clients may still do so. Therefore it's possible that your partner is still paying interest to the original lender. 18 years of payments at £15 per month means that he's paid £3240 i total but, it seems, that only £1520 of that has gone towards paying off the debt (as, in the early...
19:47 Thu 15th Jun 2017
It all depends on the interest rate and the terms of the loan.
He's only paying off £180 a year; if the interest rate is as low as 5% the interest is costing him £150 in the first year, so his loan only reduces by £30.
Compound interest is more complicated but, as a first approximation without knowing the full details, the amount could be correct.
He's only paying off £180 a year; if the interest rate is as low as 5% the interest is costing him £150 in the first year, so his loan only reduces by £30.
Compound interest is more complicated but, as a first approximation without knowing the full details, the amount could be correct.
CSL don't apply any charges or interest to people's accounts. However their clients may still do so. Therefore it's possible that your partner is still paying interest to the original lender.
18 years of payments at £15 per month means that he's paid £3240 i total but, it seems, that only £1520 of that has gone towards paying off the debt (as, in the early stages of repayments, nearly all of what he was paying in will have been gobbled up by the interest charges).
As the capital sum decreases, so will the interest, so it won't take as long to pay off the second half of the loan as it did the first half.
The actual rate of interest applied to the account must be extremely reasonable anyway as £15 per month wouldn't be enough to pay off a month's interest on a £3000 loan with many accounts (meaning that someone who only paid back £15 per month would actually owe vastly MORE after 18 years than when they started) so, unless he was promised that all interest charges would be removed, he's got nothing to complain about.
However if he's now in a position to increase the monthly payments (or even to pay off the loan in full) it would make sense for him to do so, as he'd end up paying far less in interest charges.
18 years of payments at £15 per month means that he's paid £3240 i total but, it seems, that only £1520 of that has gone towards paying off the debt (as, in the early stages of repayments, nearly all of what he was paying in will have been gobbled up by the interest charges).
As the capital sum decreases, so will the interest, so it won't take as long to pay off the second half of the loan as it did the first half.
The actual rate of interest applied to the account must be extremely reasonable anyway as £15 per month wouldn't be enough to pay off a month's interest on a £3000 loan with many accounts (meaning that someone who only paid back £15 per month would actually owe vastly MORE after 18 years than when they started) so, unless he was promised that all interest charges would be removed, he's got nothing to complain about.
However if he's now in a position to increase the monthly payments (or even to pay off the loan in full) it would make sense for him to do so, as he'd end up paying far less in interest charges.
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