CCM8520 - Closing the Examination
Wording of Instalment Offers
The examples below show how to word the instalments in various circumstances. You should use the wording appropriate to your case. The amount due will rarely divide evenly by the number of months. You should therefore follow the guidance in Example 1 below:
Example 1
It is agreed that Tina’s offer including forward interest is £4,200. Tina can afford to pay £1,000 straightaway and she can pay the balance at £160 per month. The wording should be expressed as follows:
£1,000 |
to be paid within 30 days of the date of the letter notifying acceptance of this offer by you |
£3,200 |
to be paid by 20 monthly instalments of £160 each, on or before the last day of each succeeding month, the first such instalment to be paid on or before the last day of the month next following that in which the instalment of £1,000 becomes due |
until the whole of the £4,200 has been paid.
Forward interest will have been included in the £4,200 -
see
CCM8450.
The amounts due will rarely divide evenly so you should use
your judgement to work out the instalments, remembering the aim is
to get the money paid as soon as possible. In the above example, if
the amount due had been £4080 it would look unreasonable to
have the payments as £1000 followed by £40 followed by 19
instalments of £160. The instalments should be £1040
followed by 19 instalments of £160.
Example 2
It is agreed that Jean’s offer including forward interest is £2,600. Jean cannot afford to pay anything up front but can manage monthly payments of £70. The wording should be expressed as follows:
£80 |
to be paid within 30 days of the date of the letter notifying acceptance of this offer by you |
£2,520 |
to be paid by 36 monthly instalments of £70 each, on or before the last day of each succeeding month, the first such instalment to be paid on or before the last day of the month next following that in which the instalment of £80 becomes due. |
until the whole of the £2,600 has been paid.
Forward interest will have been included in the £2,600 - see CCM8450.
Example 3
It is agreed that Pat’s offer including forward interest is £3,700. Pat has paid a payment on account of £800 which you passed to the Accounting & Payments Office Network Unit to hold on account. Pat cannot afford to pay anything else up front but can manage to pay £90 per month. The wording should be expressed as follows:
£800 |
already paid on account |
£110 |
to be paid within 30 days of the date of the letter notifying acceptance of this offer by you |
£2,790 |
to be paid by 31 monthly instalments of £90 each, on or before the last day of each succeeding month, the first such instalment to be paid on or before the last day of the month next following that in which the instalment of £110 becomes due. |
until the whole of the £3,700 has been paid.
Forward interest will have been included in the £3,700 - see CCM8450.
