Welcome finance

guaccisam

Hello,
Could someone give me some advice.
I began my loan with Welcome in November 2008 and have paid my monthly payments since. The loan is due to end in November 2011. Today I called to ask for settlement figure to settle the balance today, they told me £200 more than the outstanding balance. I asked why this was, and they told me that to settle early, I would have to pay a penalty of two months extra interest. Is this right? I always thought a settlement figure would be a little less that the outstanding. Help!!
Sam

JonT82

Not too sure about Welcome, but RBS also include an early settlement figure of 58 days interest

Not sure if this is a fairly recent thing, but i'm sure previous loans i've had didn't have this charge on!

Wutang_2

Should be in original contract and also thats quite standard

iolanthe07

Look in the terms and conditions that you signed when you took out the loan. A penalty of between one and three months' interest is fairly common for early settlement.

len.sharples

I don’t see why. I have worked in finance and when you ask for a settlement and pay it early you do not pay interest as the loan is being settled and the intrest is spread over the term of the contract, I also have a car with them and asked for a settlement and did the same It should give you settlement amounts in your contract Ask them for a brake down.

Tubbss

Hi,

With a personal loan the interest is added monthly and is not front loaded like on HP. Welcome are stuggling at the moment so if you offer them the balance as full and final settlement there is a relly good chance that they will accept this.

fairmorn308

Here is the best way to go about it. I have paid off 2 loans i had with welcome early. What to do is make a lump sum payment today to reduce the account to around £900 or something, thats what i did and then called the following month and settlement figure was only £590.

Hope this helps

ILW

Tubbss wrote: »

Hi,

With a personal loan the interest is added monthly and is not front loaded like on HP. Welcome are stuggling at the moment so if you offer them the balance as full and final settlement there is a relly good chance that they will accept this.

They may also put a marker on your credit file.

guaccisam

So I think I have checked my paperwork thouroughly and haven't found any mention of this interest up front for settling early.
It does say "you can settle this agreement any time by giving notice in writing and paying off the amount you owe under the agreement which may be reduced by a rebate". What does this mean?

standupguy

All settlements must be calculated in accordance with the cca and you are entitled to a rebate of interest charges based on this.

What I suspect they are doing is including any extra charges or fees that have accrued during the life of the agreement for say arrears etc?

Ask them to send the settlement in writing and also a full breakdown of any extra fees or charges that have been added

Tubbss

Hi,

Re standupguy - the agreement is monthly interest bearing - there will be no rebate for interest charges as future interest is yet to be accrued.