Schedule 2, Part I Simple formula for calculation of rebate where credit is repayable in equal instalments at equal intervals.

Regulation 4(2)

Where credit is repayable in equal instalments at equal intervals, the rebate of charges is given by the following formula:

where

m = total number of instalments not yet due at the settlement date (deferable in accordance with Regulation 5)

n = total number of instalments payable under the agreement after the relevant date, as defined in the Total Charge for Credit Regulations

K = total charge for credit on which rebate is to be allowed

EXAMPLE

Facts

A loan of £1000 is agreed to be repaid by 36 monthly instalments of £48 starting one month after the date of the loan and the consumer settles the loan at the end of the 30th month (ie when 6 monthly instalments are outstanding)

Calculation of Rebate

K = £728 (ie 36 x £48 - £1000)

m = (6 - 2) = 4 where the number of outstanding instalments is reduced by 2 because the settlement date is deferred by 2 months in accordance with Regulation 5(a)

n = 36