Making overpayments on a loan

redrum217uk

Hi,

I have a loan with First Direct, I called them to increase my monthly payments to pay off the loan quicker. They told me I'd have to cancel the loan and take a new one out. I disagreed as this would cost me more and said all I wanted to do was increase the payments. They said they do not have a facility to allow me to do this and it is NOT possible. I argued for a while and got no where as they said its all in my t's & c's.

After reading the t's & c's there is NO mention of overpayment, it talks about paying it off all together early but nothing that mentions that I can or can't make over payments.

When I check my bank account it is simply a standing order going into my loan account which it even lets me go into the menu and edit the payments, which I'm tempted to do but i think they check that anyway.

Anyway my question is there clearly is a facility to allowed me to make overpayment's so are first direct allowed to stop me?? Any advice would be great.

Thanks

CLAPTON

there is no right to make overpayments so if they say don't do it then don't.. you will gain nothing
better to save up the money until you have enough to settle the account early.

CHR15

Open a Savings account.

Stick the extra money in there until you can pay it all off (and benefit from the mediocre interest payments)

redpete

1stdirect have told you that there is no facility for overpayments, the Ts&Cs don't mention any facility for overpayment; my uninformed guess is that there is no facility for overpayment.

Unless there is an explicit facility there is no obligation for a lender to accept overpayments - after all it's usually in their interest to keep the loan open and earn the interest that you agreed to pay.

JasX

redpete wrote: »

Unless there is an explicit facility there is no obligation for a lender to accept overpayments - after all it's usually in their interest to keep the loan open and earn the interest that you agreed to pay.

if you think you might want to make overpayments at some point its kinda one of those important questions you ask upfront BEFORE you sign up for the loan..... you'll now be tied in to whatever Ts & Cs you agreed to at the start