Early settlement figures - Newbie question

rawkinrich

Hi all

I've just recieved the paperwork through for a loan I've applied for.

I am looking to repay the loan off early (hopefully around 6 months ish) and on the agreement I've seen some figures which baffle me.

Basically, it says

If you settle your loan early, the settlement amount you would have to pay per £1000 borrowed would be as follows:

If you wanted to settle when a quarter of the repayment period had passed the settlement amount per £1000 borrowed would be £792.40

if half of the repayment period had passed the settlement amount per £1000 borrowed would be £550.54

and so on...

Now on first glance these figures are scandalous, I must be missing something?

Any explanations would be great!

Many thanks

the_insider

Basically they are saying that they won't just accept half of the remaining balance just because you've made half the payments because they will miss out on the interest. Why do you think it's scandalous?

rawkinrich

the_insider wrote: »

Basically they are saying that they won't just accept half of the remaining balance just because you've made half the payments because they will miss out on the interest. Why do you think it's scandalous?

I read it as if I pay want to settle the loan after 6 months, I have to pay £792.40 X 2 1/2 as I borrowed £2500.

I must be stupid :rotfl:

CLAPTON

They mean that if you settle after a quarter of the period (6 months) the you need to pay
2.5 x 792.40 i.e you need to pay £1,981 to settle the debt

which is reasonable and in accordance with the CCA regulations.

rawkinrich

CLAPTON wrote: »

They mean that if you settle after a quarter of the period (6 months) the you need to pay
2.5 x 792.40 i.e you need to pay £1,981 to settle the debt

which is reasonable and in accordance with the CCA regulations.

Many thanks for clearing it up - I totally misunderstood the fee's.