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The Consumer Credit (Early Settlement) Regulations 2005 
Made 5th June 2004 Laid before Parliament 9th June 2004
Coming into Force 31st May 2005

New Regulations are now in force regarding the calculation of rebates when loans are repaid early. A calculation known as the Rule of 78 has been used historically; however it was felt that this was unfair to clients. A new calculation was therefore established as detailed below. Questions and answers are detailed below in order that you may be aware of the various issues that have arisen in the implication of the formula.


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Q/ Is this a simpler calculation than the Rule of 78?
A/ No, the formula is considerably more difficult to implement.

Q/ But will all finance companies have to use the same formula.
A/ Yes they will, but it is unlikely that any two companies will have the same result unless they use the software from the same supplier.

Q/ Has SwiftQuote been updated to reflect these changes.
A/ Yes, however there will have to be a tolerance factor the software can be downloaded here. 

Q/ Will the formula produce repeatable accurate results.
A/ No, this is due to inherent rounding errors that will occur.

Q/ Where can I obtain more information?
A/ There is no official helpline, We would suggest that you read the Statutory Instrument 2004 No.1483.




Telephone - 01708 371584

Email - info@swiftquote.com