maxmarengo
Member of DD Central
Posts: 96 
Likes: 28
|
Post by maxmarengo on Aug 23, 2014 13:04:34 GMT
Interestingly, FC appear to apply the opposite approach to charges - they round up the first fee and charge you less when the fractional debt gets below 0p.
Having said that, these amounts are too low for even my over precise methodology!
|
|
|
|
Post by chielamangus on Aug 23, 2014 13:26:21 GMT
FC has stated previously, IIRC, that it accumulates on your account in the background until it reaches the 1p threshold and gets recognised in the account value etc. I guess there is a hidden account somewhere for everybody with fractions of a penny accummulating which is also a source of credit for all those fractions where one has not paid the full exact amount - have just checked and FC fees are sometimes rounded down. Swings and roundabouts.
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Aug 23, 2014 14:42:37 GMT
It was confirmed a long time ago, and there was something in FAQs, (please don't ask me to specify), which confirmed effectively that the calculations for each loan part are made at a higher resolution than the level of a penny. Interest is paid to the current holder in whole pennies rounding up when the accumulated roundings for that loan part reach a half penny. Of course it would be quite impossible that the fixed monthly repayment and interest could be exactly distributed among all those twenty pound loan parts without some getting a penny and some getting nothing. So FC presumably holds a high resolution account for each loan part for interest, repayments and fees, and therefore also a cash account of roundings which holds the balance. I thought, from my account, that fees worked the other way in that a whole penny is taken where a part is due, but then that overpayment is reduced monthly. One can understand that FC would want the roundings balance account (or whatever) to be in credit -it's not their money.
Presumably this means that all the £20 loan parts at the same interest rate on the same loan are subject to the same action each month. But I have never worked out how the last payment is managed, when you have to clear the roundings balance for the loan and give exactly the same payment to each £20 loan part at the same interest rate. On the fixed rate property loans for example, will the last interest repayment be the same for every £20 loan part?
It does make you realised that the basic engine at the heart of the FC platform is rather more complex that it might seem to be at first sight - and it seems to work. The software must be maintained by a team of one person and one dog. The person is there to feed the dog. The dog is there to keep the person away from the code.
|
|
|
|
Post by GSV3MIaC on Aug 23, 2014 15:51:04 GMT
Whoa!! You got to have a manager too, to ensure man and dog fulfil their intended roles properly. Hmm, maybe two managers, just in case, one with a pro-canine bias.
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Aug 23, 2014 16:25:28 GMT
Some would consider the staffing (person and dog) over-generous for the purpose without adding a manager. The person would be a self-employed contractor, engaged through an agency and changed weekly before he/she could understand the software. The dog would be on a weekly rotation from the pack kept by the insolvency team.
|
|
maxmarengo
Member of DD Central
Posts: 96
Likes: 28
|
Post by maxmarengo on Aug 24, 2014 7:32:21 GMT
Ok, now added tax to my model. Have assumed:
1) 20% rate
2) paid in the December after the tax year end
3) fees are netted off the interest to give the taxable amount (cashback is excluded)
This takes the EAR on a 12 Month/8%/2% cashback from 9.1% to 7.8% and the 18 month/9%/2% cashback from 9.6% to 8.0%
|
|
