22 Mar 2015

A question about : Trying to clear of outstanding!

So, In May 2011 i took a T.V with Brighthouse, we didn't have any credit history and needed a T.V badly in the house we had moved into. We were a bit skint at the time so we knew the risks etc with Brighthouse but at the time it was good for what we needed so we took it. For the past 112 weeks we have been paying our normal payments as it was a 156 week plan. I'm going to show how the plan was/is laid out-

The T.V. was at a cost of Ј1584.30

The interest Brighthouse wanted was Ј696.42

I was forced to take (or i wouldn't/couldn't get the T.V) Damage Liability Cover Insurance which was Ј341.64

In total the = Ј2622.36

So when you do the Math-

The T.V is a weekly amount of Ј10.15
The Interest is a weekly amount of Ј4.46
The compulsory damage liability cover is a weekly amount of Ј2.19

= A weekly amount of Ј16.80

On the basis that you are all following me, so far over the 112 weeks i have paid which was agreed and that i have 44(.8 apparently) weeks left-

Ј1136.80 on the cash price of the T.V leaving Ј447.50
Ј499.52 on the Interest of the T.V leaving Ј196.90
Ј245.28 on the compulsory damage liability insurance leaving Ј96.36

Now all fine and Dandy and both me and Brighthouse agree on. So this week i called brighthouse because i wanted to clear my account and pay off the outstanding, They told me that it was all done in store these days and that i should go in and i can take care of it, so i did. so i am in the store and at this they started throwing around this acronym E.P.O (Early Payment Option) and started scurrying around, Now to be clear i have went through the contract and it more or less simply states You have the right to pay off early Nothing about figures!

So i had the sum in my head as at the start of the agreement i made an excel spreadsheet which did all these calculations for me (and brighthouse agree with of sorts) but (and here is where i need your help) as far as i am aware when you go to clear anything off, Loans, Credit Cards etc if you are paying the full amount then no interest should be added?
Because what Brighthouse are saying to me is that if (and so far i am paid up till this Saturday so daily interest doesn't apply) i want to pay everything off it is going to cost me (roughly give or take pennies) Ј590.
So at this if you are confused then you share my confusion because they State No interest on the product is payable with an early settlement

But wait i've been paying for over 2 years on a three year contract so how could the cash sum left be over a 1/3?

Well after an hour of showing this lady in the store and even her doing this on the calculator agreeing with me that i have never missed a payment and that i have 44(.8 which i dont agree but its a tenner) weeks left her final words were I Never trust Calculators and walked away.

Hmm, so i went through to Customer relations and told them off this and they said they would look into it and get I.T to confirm/look into and get a Regional Manager to call me back, the next day which was yesterday the store Manager called me and said that I.T had came back and confirmed that the figure was infact Ј590 (or there about). What she did say at the end of the conversation however was (in a quiet voice might i add) that even settlement figures include Interest! Boom!

So i have called today to complain, Customer relations confirm again that no interest payable with early settlement figures, but they still maintained that the settlement figure was over 1/3 of the cash price even though i am over 2/3's into the contract. Based on all of that i have initiated a complaint with Brighthouse.

Please help somebody with anything else, maybe something i am missing. title=Top

Best answers:

  • At the start of a finance agreement you owe more so more of your weekly payment is interest and less is capital. As the debt is slowly repaid the interest reduces and the amount you pay off the capital increases.
    So this
    Quote:
  • Yeah 29.9%
    That makes sense now, they get all their interest first basically. It'll be worth asking them though if they took equal payments all the way through because in no way does it explain that in the contract.
    Thanks though Tixy
  • Infact (if this is any use) it doesn't say how they work their payments but it does say-
    "29.9% per annum. The interest has been pre-calculated at a weekly rate of 0.504% on the balance to be outstanding immediately before each weekly payment on the assumption that each payment is made on the due date. Each weekly payment includes the interest in respect of the week preceding that payment."
    I'm not that educated but does that not mean that each payment is equal throughout?
    This is straight from my contract btw
  • it means you pay interest according to the current balance. So each week, as the balance decreases, so does the interest.
    Its pretty standard for any loan
  • I'm sorry, the TV you bought was Ј1,500 before interest and the cover plan? You badly needed a TV?
  • This guy is asking for contract advice not your opinion on how much he spent on a TV. Play fair, this is not the Daily Mail.
  • i wouldn't say you need to be seriously wealthy to spend alot on a TV.
    i wouldn't class myself as wealthy but i spent over Ј1000 on a TV.
    i didn't get it on credit thou
  • We bought a really good flat screen 32" tv for Ј350. It seems to do the job ok
  • To answer your question.
    As you can see below you are paying mostly interest at the beginning with the balance reducing by a smaller amount.
    ....................Week 1 ......Week 2 .......Week 3
    Balance .........1925.94 ......1918.85 .....1911.72
    Interest ..........9.71 ..........9.67 ..........9.64
    Capital Paid .....7.09 ...........7.13.......... 7.16
    So based on this week 121 looks like
    Balance ......760.47
    Interest ......3.83
    Capital Paid .12.97
    So with a settlement of Ј590 you save Ј170 of interest.
    Calculations are.
    Balance = TV cost + Insurance. (don't add in the interest)
    Interest = balance x 0.00509 (0.509/100)
    Capital paid = Ј16.80 - interest
    Next balance = balance (previous week) - Capital paid
    Edited as the forum hates excel.
    Rob
  • I get it now thanks guys, That was just something i didn't understand about Loan arrangements, To be fair neither did the Staff in the shop where i got the T.V.
    And yes i understand it was pricey, It is a Samsung Smart TV and when they first came out they were expensive, i know, gutted when you look at the price they cost now but hindsight is a beautiful thing lol
    We now have a second TV in the bedroom which cost (as victoria61 says) around Ј350 and works great.
    T.V's paid off now anyway. Thanks for all the advice folks
  • Well done on getting it paid off mate thats one less thing to worry about, it's a good feeling to completely pay something off and get that money back in the monthly cash flow :-)
  • Oh absolutely, extra Ј60-Ј80 a month in the bank! Unless the missus tries to conjure a way to use it!
  • Sorry, I didn't mean to be judgemental, and well done for paying it off. It just floored me that there are people who can afford to pay 2 grand for a television. And the interest rate did seem extortionate. Sorry.
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