Help - Settling loans early and Interest

weedweaver

Hi All, I have an issue with a loan I took out and want some advice. After leaving uni I had a few credit cards and a bank loan. The original bank loan I took out was for a few grand and the interest was charged on top of the loan (based upon the duration of the loan - 4 years I think) and then added to the final amount. I wanted all my debts in one place so a year or so later I took out another loan with the same bank which encompassed my original loan and the high interest credit cards etc. The issue I have is that this loan, instead of settling the original loan, paid off all the remaining balance. Now if im right, when you settle early, you are entitled to save some money on interest based on how long you have had the loan and the duration left, this was outlined in the loan contract. This did not happen however and the total remaining balance was paid off in full and I never receievd money back on the interest for settling it early. Is this right? Am I entitled to money back? Effectively I have paid the whole of the interest off on that loan which was calculated on the duration of the loan but I only had the loan a year or so, so surely I shouldnt have paid interest for 4 years when I only had it for a year?
Hope this makes sense.
Thanks

CLAPTON

without you quoting all the details it's impossible to give an opinion

why do you think you were charged all the 'potential ' interest on the original loan... do you have documents that show this

weedweaver

the original loan was made up of an interest charge and the loan amount which came to 4,800 (the interest was calculated up-front and added to loan amount - I then had regular payments by s/o per month). I paid this for about a year and by the time the other loan came in the total value left to repay was approx. 3500, the other loan paid this 3500 off (which inlcuded the interest charged over the 4 year period) so even though this loan was settled 3 years early the 4 years interest was still paid (but by the other loan)

Does that make sense?

CLAPTON

no, its most unlikely

loans usually show the capital borrowed and the total interest due assuming the loan runs to full term
but that does not mean that all the interest is payable on early settlement

when was the loan taken out
how much was the original loan for
what was the APR
how much per month
how many payments were due
did you take out PPI
did you have any payment holiday or any missed payments

how many payments were made before refinancing
what exactly did the refinancing statement say