Early Settlement On BarclayCard Loan - HELP!

Bosewave

Hi there

I am writing for help on behalf of my girlfriend and wondered if you guys could offer some sage like advice?

My girlfriend currently has a loan for around £9,000 in total and has been slowly paying it back over the last 3 years. She has another 2 years to go and has £6,000 left as a balance. I know this £6,000 isn’t purely the loan she has taken out because she should in theory be over the halfway mark so the remaining balance shown is with interest IF she were to take the loan full term and pay it off monthly over the 5 years.

What I wanted to know was if she settled the loan early, could Barclaycard legally charge her the remaining interest she WOULD have paid if she took it full term or would she just settle the actual loan part of the balance and the interest would be written off

The reason for my asking is that we are intending to move the remaining balance over to a couple of credit cards that allow us to do a "super balance transfer". This way it free’s up the debt into credit cards that have a nice 12 - 16 month 0% interest window to really make a dent in the debts whilst not getting destroyed by the interest charged. I think she pays £200 a month as a repayment, £80 of which I think is interest if im not mistaken

Many thanks for any help you can provide.

Mark

Tulip10_2

Hi,

My partner has a loan of £15,000 he was told by his bank that if he wants to pay it back early, which he does, to pay off 99%, they cant charge interest on this and will only charge it on the remaining 1%. I would ring them and ask them point blank if this is the case.

Hope this helps

Bosewave

Haha really? Surely thats a bit of a loophole they need plugging up? I am going to ask her to ring them to see but just wanted a heads up from a legal perpective in a situation like this!

LeeSouthEast

I had a Barclays loan (do Barclaycard even do loans?), that I paid off early. In doing so I saved myself £1,000 or so. The 'fee' for doing an early settlement was 1 month's interest only. Ring up the loan line and ask for a settlement figure for 'today'. This is non-binding (i.e. you don't have to settle once they generate it), but will give you an idea.

Bosewave

I mean Barclays not Barclaycard doh! This is most comforting to hear! I am going to see about giving them a ring later on to see what the settlement value would be and take it from there. Now we have to try and get a credit card that will give her a limit of circa. £4,500 to cover it!

Bosewave

Hi guys

I have an update on this, basically these are the facts:

Loan Amount £8,800
Interest £3,392
TOTAL AMOUNT PAYABLE £12,192 (over 5 years)

Total Paid £6,189
Total Remaining £6,003

My girlfriend phoned up Barclays and spoke to them, asking to see how much the settlement price owould be if she paid it today and finished her contract with them. Shockingly they turned round and said that the amount to pay would be the full amount at £6,003 + 1 months interest as a settlement fee

What I cant understand is how they possibly want to charge the full amount for the whole term when I am paying it off 2 and a half years earlier than my final payment date, it just doesnt make sense. They cant pull the "loss of earnings" card can they, seeing as I am basically taking away theiroppurtunity to make money off e by settling earlier than the agreed date. My girlfriends contract states you can settle earlier, but the you have to pay an extra months interest as a penatly which is a drop in the ocean in comparison to the long term costs it will accrue

HELP!

CLAPTON

what is the apr
what is the monthly payment
how many months has she paid
were there any payment free months at the beginning
was the settlement figure in writing

Bosewave

what is the apr 14.9%
what is the monthly payment £203
how many months has she paid 30
were there any payment free months at the beginning YES the first month
was the settlement figure in writing - No it was over the phone

CLAPTON

on her loan agreement there should have been illustrations about the settlement figure after 1/4, 1/2, 3/4 of the period.

in the early stages of a loan the interest payment is relatively high because you owe a lot; the interest element falls as time goes on because the balance reduces

I would estimate that after 30 payments the capital remaining should be around 5,200 or 5,300. They can add a months interest on giving another £65 so the settlement figure does seem higher than I would expect

have a look at the loan agreement and see what is says about early settlement

tygar2

Hi

The amount doesnt sound right as I worked the balance should be about £5418 after 30 payments pf £203 (search fo time period calculator on google).

Maybe go down to the branch and work it out with a personal banker.
Have you double checked that the £203 repayment does not include payment insurance? This might explain the higher oustanding balance as less than the full payment would actually be going towards debt repayment.

Hope that helps.

LeeSouthEast

Based purely on my own experience, that does seem very off.. A chat with a personal banker in person might not be a bad move.