halifax personal loan

gtsm

Hi i have a halifax personal loan of 10000 over 7 years and have been paying £176 a month for 2 years. I called to get settlement today and have been told figure of 9064, which means with interest and insurance works out 14874.

so leading to my question i call today and got settlement of 9064 and to be told all i had paid was the interest on the loan after 2 years !! does this sound right as i thought the interest was added over the period of the loan not at the beggining. which means there is no point in settling early ?

thank lee

CLAPTON

if the loan runs its course the you pay 14874; if you pay now you pay 9064 ....... it that right? if so by paying early you save 5720... whether thats good or bad is up to you.


the interest works on a daily basis so you have paid some capital back, although obviously in the early stages of the loan because you owe a lot the interest is high.

enjoyincubus

Interest is calculated on a daily rate, so if you settle early the proportion of interest (and insurance) not yet accrued should be refunded.

This site may be quite useful:

http://brian-stewart.orpheusweb.co.uk/credit/javascript/equalr78-prr.htm

Assuming you borrowed £12,000 (£10,000 loan + £2,000 insurance) and are settling your loan after 24 months it says you are due a refund of the original balance of £1,255 - giving a settlement figure of £9,124.

The Halifax figure provided is £9,064 - the difference between the two I can only assume is the rebate on insurance. Also the figure may differ as with Halifax loans for the first two months you don't make a repayment, but you are charged interest on the full balance. Oh yes, and you may have been charged two months interest for settling early also.

The settlement figure seems high considering how early you are settling and how much you have paid so far, but its all rather complicated maths required to work these things out!

regularsaver1

they charge 56 days interest for settling early - which all companies can do, but you will get a rebate also

when taking the loan you would not have made your first payment until the 3rd month