How do they get this result for loan payments?

Question

A full page avertisement in a British newspaper supplement, advertises the company's loans and gives the following example:-
Loan amount £75,000
Number of months 300
Monthly payments required £562.47
Based on annual percentage rate (APR) of 7.9%
These payments do not include any any loan insurance etc

Calculating by the mathematically correct formula, I get the monthly repayments £560.48
The difference is appreciable. How do they get their result?
If I am correct, how is it that companies are allowed to deceive their customers?

Please note that I am not saying that the bank is charging too much or too little. What I am saying is that either the monthly payment is wrong or the interest rate is wrong.
How are the two items reconciled?
What formula are they using to get their answer?

Answer 1

Use loan calculator on Internet. It is more accurate then most bank uses.

Actually you are off by deference between 562.47 and 560.48= 2 approx. per month comes to 600 approximately over 300 month. The deference come from payment time, some collect first and the last payment at the stat of the loan. Bank is using old hand calculated amortisation table. They had balloon payment at the end that means loan was paid a month or two faster or so.

Answer 2

The difference is £2. per montth. You will end up paying £600 in 300 months. Banks may have crores of customers.

Now we shall realise that the bankers would make up their loss by collecting this £2. per customer. Because there may be a number of defaulters in repayments.

Or the bankers must have a plan to collect the Principal faster from all those customers.

And ... i hope that the bankers must have adopted the idea that no one would mind to pay their mothly installments if a petty £1/ £2 is added more.

But if you approach them properly,
they may correct it or they may assure
you that the final installment would be waived off
(in this case you will have to wait for 300th month)
or they may show their own calculation to prove they are correct.

Make a smart approach..............
Dont loose your money !

Athi says............