ding
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Post by ding on Jul 19, 2017 15:07:18 GMT
Just had a look to see if it's worth doing a sellout to get a few more tenths of a percent. RS fee would be £0 but the accrued interest which I would receive was less then I expected.
I then looked at an existing loan.
14 July > 16 August = 33 days
£1018.24 @ 2.8%
RS calculates expected interest as £2.38
My calculations:
1018.24 x 2.8% = 28.51072
(28.51072 / 365) * 33 = 2.58
Has anyone else checked the math?
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robski
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Post by robski on Jul 19, 2017 15:11:49 GMT
They assume reinvestment, hence APR
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alender
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Post by alender on Jul 19, 2017 17:47:33 GMT
AER interest calculations are not that simple unless it is for a full year and require some complicated maths, the best way to check is either on a website calculator or ACCRINT function in EXCEL, I find using a Basis of Actual/actual give a close result to RS.
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jonah
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Post by jonah on Jul 20, 2017 7:59:10 GMT
If it helps RS still charge the fee but then return it. This returned fee is seen as cashback, so is tax free. As the fee reduces your interest rate, it reduces your tax liability.
Net result, a reduction in tax owed.
Edit: - for clarity, the above is based upon the previous 'no fee' offer, not this one. RS could be doing this differently this time.
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ding
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Post by ding on Jul 20, 2017 9:48:06 GMT
Thanks for confirming thinks are ok. I'm more used to APR then AER.
jonah - that would be a massive benefit, I wish more sites would game the tax system with cashback!
I just withdraw and the sellout fee was £0, no mention of cashback in account history. Perhaps due to email offering 0 sellout fees has altered things.
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jonah
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Post by jonah on Jul 20, 2017 10:31:44 GMT
Thanks for confirming thinks are ok. I'm more used to APR then AER. jonah - that would be a massive benefit, I wish more sites would game the tax system with cashback! I just withdraw and the sellout fee was £0, no mention of cashback in account history. Perhaps due to email offering 0 sellout fees has altered things. Could be. I was basing that on the previous 'offer'. If they are doing it differently this time then maybe that wouldn't apply.
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