25 May 2023
The total repayable refers to the overall amount a borrower must repay to the lender over the term of a loan or car finance agreement. It includes the principal amount borrowed, any interest charges, and any applicable fees or charges specified in the loan agreement. The total repayable represents the complete financial obligation of the borrower to fully settle the loan.
Understanding the total repayable is essential for borrowers as it allows them to have a clear understanding of the entire financial commitment associated with the loan. By considering the total repayable, borrowers can evaluate the affordability and cost-effectiveness of the loan option. It helps borrowers make informed decisions, budget their finances, and ensure they can meet the repayment obligations throughout the term of the loan.
Suppose a borrower takes out a car finance agreement with a principal amount of £20,000, an interest rate of 6% per annum, and additional fees totaling £500. The loan has a term length of five years. To calculate the total repayable, you would add the principal amount, the total interest charges over the term, and the additional fees. In this case, the total repayable would be £24,300 (£20,000 + £4,300). This represents the total amount the borrower would need to repay to the lender over the course of the loan agreement.
|Total charge of credit||£0|
|Total amount payable||£0|