Early Repayment Calculation

smsfrancis

Hi all

I started a thread in DFW, but I've come to a sticking point in that I'm not sure of my calculations! Wondering if someone can help:

57 days interest charged on early repayments.

I've had a stab at this and used the calculator on this site:

Annual interest of 13.5% means a monthly interest rate of 1.06%

Put this simply, every £100 that I over repay them, I really only pay £97.88 off of the loan? So if I paid them £1400 lump sum, they'd take £1370.32 off the loan... cost £30ish... but if I left that £1400 in the loan, it'd generate £189 of interest per year - potentially £800ish for the life of the loan...

Are my sums right?! *brain splodes* :eek:

Thanks in advance
Scott

CLAPTON

what do you mean 57 days interest for early repayment?
where does that come from?

smsfrancis

I looked on the Natwest personal line website today and, under their charges, there is a line that says:

Early Settlement 58 days interest charged

I am assuming that this means, of what you over pay, they charge the equivalent of 58 days interest on that amount.... is that right?

CLAPTON

It says early settlement ..which means that you pay off the loan completely
that's the law


however overpayments are NOT the same thing and are not regulated by the CCA and may or may not be allowed and may or may not have other penalties.

smsfrancis

Right, I just rung Natwest and she stated that the 57 days interest applies to paying off the whole amount (as you rightly said) but I am allowed to make lump sum reductions.

The lady said that this does not reduce the remaining term of the loan but does reduce the monthly payments.

This seems good to me... does it seem good to you guys? In that I could pay off £2k lump sum and have smaller monthly payments and, as a result, less interest?!

One thing did cross my mind... what if you made a lump sum that left £1 in the account... no charge? :cool: