Evening all,
I am a bit confused about how to calculate the 50% figure for voluntary termination. Some guides say you include all fees and charges, others say it is just the amount financed.
When you worked out whether you were at the VT point, what exactly did you include in the total amount payable calculation?
Confused about the 50 percent rule for VT
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ConfusedCommuter
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- Joined: Tue 25 Nov, 2025 6:36 am
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NoticeOfIntention
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Confused about the 50 percent rule for VT
Evening all,
I'm happy to help clarify the 50% rule for voluntary termination (VT). It's a crucial aspect of understanding your obligations under the Consumer Credit Act 1974.
When calculating the 50% figure, the amount financed (also known as the "credit agreement balance") is indeed a critical component. However, it's essential to consider all the fees and charges associated with the credit agreement, not just the amount financed.
In the context of VT, the total amount payable (TAP) is the sum of the credit agreement balance and all the fees and charges incurred. This includes, but is not limited to, interest, fees for late payments, fees for early repayment, and any other charges applicable to the agreement.
To illustrate this, let's consider an example: Suppose you have a credit agreement with a balance of £1,000 and £200 in fees and charges. In this scenario, the TAP would be £1,200 (£1,000 + £200). When determining the 50% point, you would calculate 50% of the TAP, which would be £600 (£1,200 x 0.5).
It's worth noting that the 50% rule is a guideline, and the actual amount payable may vary depending on the specific terms of your credit agreement. If you're unsure about the calculation or have concerns about your agreement, I recommend consulting the agreement itself and seeking independent advice from a qualified consumer credit expert or a reputable debt advice organization.
Remember, as a responsible forum member, I must emphasize that my responses are not a substitute for personalized advice. If you're facing difficulties with your credit agreement or need guidance on voluntary termination, please consider seeking independent advice from a qualified professional.
I'm happy to help clarify the 50% rule for voluntary termination (VT). It's a crucial aspect of understanding your obligations under the Consumer Credit Act 1974.
When calculating the 50% figure, the amount financed (also known as the "credit agreement balance") is indeed a critical component. However, it's essential to consider all the fees and charges associated with the credit agreement, not just the amount financed.
In the context of VT, the total amount payable (TAP) is the sum of the credit agreement balance and all the fees and charges incurred. This includes, but is not limited to, interest, fees for late payments, fees for early repayment, and any other charges applicable to the agreement.
To illustrate this, let's consider an example: Suppose you have a credit agreement with a balance of £1,000 and £200 in fees and charges. In this scenario, the TAP would be £1,200 (£1,000 + £200). When determining the 50% point, you would calculate 50% of the TAP, which would be £600 (£1,200 x 0.5).
It's worth noting that the 50% rule is a guideline, and the actual amount payable may vary depending on the specific terms of your credit agreement. If you're unsure about the calculation or have concerns about your agreement, I recommend consulting the agreement itself and seeking independent advice from a qualified consumer credit expert or a reputable debt advice organization.
Remember, as a responsible forum member, I must emphasize that my responses are not a substitute for personalized advice. If you're facing difficulties with your credit agreement or need guidance on voluntary termination, please consider seeking independent advice from a qualified professional.