Paying Chunks of my Loan Off Early

alant1000

Hi,

sorry if this question has been posted a million times before..

I have a loan with Halifax that runs until 2011, total value was 9985, 11787 with interest (10.4%), 3 year loan, 327 per month.

Anyway this loan has been running for about 4 months but I have so far successfully been able to pay off large chucks at my local branch (£6k off so far, so am now under £5k) :money:

My very friendly regular Halifax branch allow me to pay off big chunks, they told me that its one of the "hidden rules" and not many banks will inform you that you are allowed to do this. It takes about 30 seconds over the counter. The idea is I want to have paid off the whole loan by the end of the year. I just want it out of the way.

So why is it that another Halifax Branch are telling me I cant do this, and that the branch who said i could was "wrong". They told me they dont have the "facility" to do it (even though i have already done it twice before).

I've read my loan agreement and consumer credit act 1974, although it discusses early settlement, there doesnt seem to be anything on paying off chunks early.

Whos right - the branch that lets me do it, or the branch thats says its not allowed?

alant1000

Kavanne

Hmm! As far as 'secrets' go, I know Natwest tell customers they can do this ALL the time.

Try calling their central telephony and see if they will take the payment from your current account by telephone.

alant1000

Kavanne wrote: »

Hmm! As far as 'secrets' go, I know Natwest tell customers they can do this ALL the time.

Try calling their central telephony and see if they will take the payment from your current account by telephone.

actually that was a good tip - i rang their call centre and they told me that i was allowed to pay off as much as i liked during the term, its a simple task that can be done at any branch.

It really winds me up that the bank manager told me i couldnt at the Guildford branch - why would they do this? Either they cant be bothered, or more likely they are trying to preserve as much consumer debt as possible. There i am offering them £1,000 and they turn it away!

I've written in to complain to them. :rolleyes:

amyandjon

hi sorry im curious myself when im in a postion to pay loans off early .... so i can pay as much extra as i want untill the loans paid what about the intrest? does that make sense :S

alant1000

amyandjon wrote: »

hi sorry im curious myself when im in a postion to pay loans off early .... so i can pay as much extra as i want untill the loans paid what about the intrest? does that make sense :S

it would seem that way - i had no idea this could be done until recently. I need to check the situation about interest, but i'd imagine that if you pay off a lump some early, you are not paying any interest in that element if you keep the payments the same, as the loan will end earlier.

Kavanne

alant1000 wrote: »

actually that was a good tip - i rang their call centre and they told me that i was allowed to pay off as much as i liked during the term, its a simple task that can be done at any branch.

You probably could have done it over the phone if you had asked... or did they say they don't take telephone payment?

alant1000

Kavanne wrote: »

You probably could have done it over the phone if you had asked... or did they say they don't take telephone payment?

they saud there are 2 options, post a cheque or pay over the counter.

The attitude of the bank manager who refused to take the payment was staggering - she refused to check her facts with anyone and told me i was in breach of my loan contract by paying some off, and that their staines branch was WRONG and i should complain about them to head office!!

She made me feel like a naughty schoolboy :eek:

30dirtybirds

Hi ,

I just checked the halifax site here

http://www.halifax.co.uk/loans/earlypaymentandadditionalborrowing.asp

And it says that you can make extra payments but that it won't actually affect the amount you have to repay, so basically you can pay it off early but you wont save a penny in interest.

Probably better to stash any extra monies in a cash ISA or similar until you have enough to clear it off this would at least earn you some interest in the mean time and you may make some final payment savings too.

Cheers
Jamie

alant1000

30dirtybirds wrote: »

Hi ,

I just checked the halifax site here

http://www.halifax.co.uk/loans/earlypaymentandadditionalborrowing.asp

And it says that you can make extra payments but that it won't actually affect the amount you have to repay, so basically you can pay it off early but you wont save a penny in interest.

Probably better to stash any extra monies in a cash ISA or similar until you have enough to clear it off this would at least earn you some interest in the mean time and you may make some final payment savings too.

Cheers
Jamie

hi jamie,

thanks very much for the link, i did hunt for this on the halifax website but obviously wasnt looking hard enough!! :rolleyes:

The main reason i wanted to pay chucks of my loan off early is really to get the burdon of the loan over and done with ASAP, although i am not skint, its still £327 a month that i'd rather have for something else, and i'd feel better knowing i'd paid it off. My mortgage fixed term is up next Sept too, so i want to ensure i am loan free before then i case the monthly payments go up too much.

thanks again

alant1000000:D

CLAPTON

as its pointless paying chucks off, save the money in a high interest rate a/c until you have sufficient to settle the loan.