Early Settlement: Santander Wordings

KPaul

Folks,

I'm trying to get my head around the wording differences between the loan contract terms advised by Santander on its web site and those in the actual contract.

On the web site it states: "We will determine your settlement date and any rebate of interest to which you are entitled in accordance with the Consumer Credit (Early Settlement) Regulations 2004. If the agreement is for a term of more than one year, we may charge you one month’s interest to cover the cost of setting up your loan."

Sounds good and easy, eh? Pay an extra month's interest to pay off the loan early. However, the formal contract, in the Key Information section, says:

"If you settle your loan early, the settlement amount that You would have to pay per £1000 borrowed would be as follows, for example,

- if you wanted to settle when a quarter of the repayment period had passed the settlement amount per £1000 borrowed would be: £789.43
- if half of the repayment period had passed...: £550.86
- and if three quarters of the period...: £288.52 ..."

I'm no mathematician (as someone will probably now demonstrate!) but aren't these terms contradictory? The latter terms on a £10,000 loan over 5 years, if paid off in 3 years would surely amount to more than just a month's interest?

Thanks,
KPaul

Tixy

They don't look quite right but what is the APR? thats relevant to work it out.

KPaul

Tixy - 7.9%

Thanks
KPaul