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Quick question RE how early repayment works, particularly Tesco/Saisnburys
steelercaz13
Posts: 40 Forumite
in Loans
Hi there
I am about to apply for a loan from either Tesco or Sainsburys, at 8%, but don't fully understand the information provided about early repayment.
For Sainsburys it says "You can repay your loan at any time during the repayment period. To do this you need to pay off the amount under this agreement, which may be reduced by a rebate. "
Does this mean you would only have to pay off the remainder balance of the initial loan, or the remainder balance of the loan plus total interest for the rest of the loan??
Not sure if that makes sense, so using totally out of proportion example figures, if I wanted to lend 10,000, over a term of 5 years, which had a total interest over that 5 years of 2,500, when I wanted to settle my loan early would it be the remainder of the 10,000, or the 13,000 total??
Tesco says: "You will be charged up to two months interest if you choose to settle your Tesco Loan early."
I ask because I will be due a couple of large sums of money in the next 1-2yrs, and want as much flexibility to repay early as possible... It might either be the full balance, or just big chunks at a time.
Thanks all!
I am about to apply for a loan from either Tesco or Sainsburys, at 8%, but don't fully understand the information provided about early repayment.
For Sainsburys it says "You can repay your loan at any time during the repayment period. To do this you need to pay off the amount under this agreement, which may be reduced by a rebate. "
Does this mean you would only have to pay off the remainder balance of the initial loan, or the remainder balance of the loan plus total interest for the rest of the loan??
Not sure if that makes sense, so using totally out of proportion example figures, if I wanted to lend 10,000, over a term of 5 years, which had a total interest over that 5 years of 2,500, when I wanted to settle my loan early would it be the remainder of the 10,000, or the 13,000 total??
Tesco says: "You will be charged up to two months interest if you choose to settle your Tesco Loan early."
I ask because I will be due a couple of large sums of money in the next 1-2yrs, and want as much flexibility to repay early as possible... It might either be the full balance, or just big chunks at a time.
Thanks all!
Debt at 'ephiphany': £13,500 (March 1st) :eek:
Money made from ebay 2009: £130 (£600 2008)
Money made so far in 2009 from Mystery Shopping: £0 (£200 2008)
***1st March 2009 - begun claims from Halifax, Capital One and Arcadia RE unfair charges and missold PPI... Fingers crossed!!
Money made from ebay 2009: £130 (£600 2008)
Money made so far in 2009 from Mystery Shopping: £0 (£200 2008)
***1st March 2009 - begun claims from Halifax, Capital One and Arcadia RE unfair charges and missold PPI... Fingers crossed!!
0
Comments
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Early settlement figure are determined by the CCA rules
basically you pay off the capital outstanding plus up to two months interest.
different companies express themselves in different ways.
some directly refer to the interest penalty and
some talk about the total (i.e. original loan plus interest) less a rebate... but they mean the same thing0 -
Hi thanks for the superquick answer!
One more question - can you only settle your account in full at one time, or make a couple of lump payments say...?Debt at 'ephiphany': £13,500 (March 1st) :eek:
Money made from ebay 2009: £130 (£600 2008)
Money made so far in 2009 from Mystery Shopping: £0 (£200 2008)
***1st March 2009 - begun claims from Halifax, Capital One and Arcadia RE unfair charges and missold PPI... Fingers crossed!!0 -
early settlement figures are regulated by the CCA so give or take a month or so interest all unsecured loans work in a similar manner.
however, there are no regulations about overpayments (or part payments) so it's very much down to the specific loan company ... some allow and some don't0
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