Early Repayment on Personal Loan

tessykins_2

Hi,

Hope you can help. I took out a loan of £15,300 with the Halifax in June 2009 and I made my first payment this month. Since then I've discovered a much cheaper loan; I applied for this and was accepted. Now I want to pay off the Halifax loan, but have been quoted a phenomenal amount for early repayment: I currently owe them £15,000, but when I pay this loan off, I'll have to give them £16,150 approx. I'm fully aware of their need to make some money off me, but I was wondering if anyone could advise me on something to do so that I'm not penalised so heavily.

Cheers

Tessy.

CLAPTON

Is the settlement figure in writing?
did you take out PPI?
what was the APR
over what period was the loan?
what was the monthly payment?

tessykins_2

Thanks for getting back. No, I don't have the settlement figure in writing, but was told when I phoned that the settlement quote they gave me would be available until the 18th Sept. I'm not sure of the APR (in work, loan docs at home); I took the loan out over 7 years and am paying £330 per month. Didn't take out PPI.

Thanks

CLAPTON

how many payments have you actually made

tessykins_2

Only one. Made last week.

CLAPTON

from the figures you provided it looks like you are paying over 20% APR

you really need a statement of the account but it looks like you will have had the loan for about three months and only paid one payment... so interest would be about 250 a month

so 15,300 plus 3x 250 less payment of 330 plus early settlement fee of another 250 or two might be about right if a little high

ask for a written settlement statement and statement of the account.

tessykins_2

Thanks so much for your advice

Grovester_2

Sounds about right.

15k loan in June, so 3 months interest at 20% (June, July, August). plus 2 months interest to settle early is about £1250 in interest, take off about £100 for capital paid settlement of just of over 16k.