LLOYDS TSB personal loan £250 charge!!!!

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back2square1
back2square1 Posts: 228 Forumite
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edited 1 November 2013 at 9:14PM in Loans
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I wanted to place a copy of a thread I have just placed in current accounts section just to make you aware of what CAN happen when you pay off your loan.

Can anyone give me some helpful tips and advice when I meet with the Bank Manager this afternoon at 4pm. The problems that I will be discussing and seeking solution to are as follows:

1. Last Wednesday I took cheque into my local Lloyds TSB branch to pay off my personal loan. Settlement figure was £17300. I sat with an adviser who processed the cheque and explained it would be cleared and loan paid Monday 26 March.

2. Today I have visited my local branch to find they have paid the loan but have charged me £250 for doing so!!!! Apparently they charge £250 because I paid loan off via the bank and not direct to Lloyds TSB Loan department myself!

3. The adviser I sat with last week never mentioned any charge would be made against me. If she had I would not have let her process it!
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Comments

  • mrmajika
    mrmajika Posts: 987 Forumite
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    All LTSB personal loans will incurr an early settlement fee equivalent to 58 calendar days worth of interest on the balance outstanding. This fee is capped at £250.

    Hope this helps.
    Whilst my posts do not constitute financial advice, I am always, without fail, 100% right! :D
  • jonesMUFCforever
    jonesMUFCforever Posts: 28,898 Forumite
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    The fee is applied (and in the terms of your loan agreement in black and white!) no matter where or to whom you made payment.

    Had you come here first we would have been able to advise you of a legal way round this charge.

    Nearly all Personal loans have early settlement fees these days.
  • back2square1
    back2square1 Posts: 228 Forumite
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    The £250 early repayment charge is included in the settlement figure that I was given. I met with the Bank Manager yesterday and he has reimbursed my bank account for £102.33.

    The information I had been told by a member of staff yesterday was incorrect apparently. After a 1 hour meeting it was agreed somewhere along the line there had been a miscalculation on the interest charged daily since I had requested loan settlement figure (£4.89 a day).

    This error was no fault of my own, it was lack of training amongst his staff when I have visited the branch and have been told the wrong information. I have now opened a bank account elsewhere and shall be transferring my wages and direct debits accordingly.
  • jonesMUFCforever
    jonesMUFCforever Posts: 28,898 Forumite
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    Must be really difficult to read a figure off a screen and press one button on the computer to get a repayment figure!
  • geordie_ben
    geordie_ben Posts: 3,118 Forumite
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    jonesMUFCforever wrote: »
    Had you come here first we would have been able to advise you of a legal way round this charge.

    This post was a while ago, but what is the legal was of getting around it?
  • Apples2
    Apples2 Posts: 6,442 Forumite
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    geordie_ben wrote: »
    This post was a while ago, but what is the legal was of getting around it?

    The way around it (if the lender allows overpayments) is to pay a lump sum into the account leaving only one months payment remaining.

    In the example above, the guy owes £17,300 so simply pay in £17,200 leaving only a tiny portion to come out as normal.

    There is no charge for the overpayment and the final months direct debit goes in and closes the account.
  • geordie_ben
    geordie_ben Posts: 3,118 Forumite
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    Apples2 wrote: »
    The way around it (if the lender allows overpayments) is to pay a lump sum into the account leaving only one months payment remaining.

    In the example above, the guy owes £17,300 so simply pay in £17,200 leaving only a tiny portion to come out as normal.

    There is no charge for the overpayment and the final months direct debit goes in and closes the account.

    Would that not still incurr a charge as the loan would be paid off early?

    Anyone know if LTSB allow overpayments?
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
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    geordie_ben wrote: »
    This post was a while ago, but what is the legal was of getting around it?


    basically if you pay most but not all the balance off (assuming overpayments are allowed) and then get a settlement figure, the early settlement fee is based on the new (much lower ) balance.
  • geordie_ben
    geordie_ben Posts: 3,118 Forumite
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    CLAPTON wrote: »
    basically if you pay most but not all the balance off (assuming overpayments are allowed) and then get a settlement figure, the early settlement fee is based on the new (much lower ) balance.

    Ah! that makes sense :) thanks guys :)

    Just need to find out if LTSB allow overpayments now
  • Spend-a-holic
    Spend-a-holic Posts: 74 Forumite
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    I have a LloydsTSB loan and mine does allow overpayments. Hope this helps!
    Desperately trying to get debt free!
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