HSBC Unsecured Personal Loan - Please Please Help

Sjdbailey

I would be grateful for any advice in respect of trying to desperately settle my HSBC loan.

Loan Details

Amount borrowed £10,500
Total interest £3,234.09
60 month term
£229.09 paid monthly

We are 44 months into the loan with 16 months remaining.

The redemption figure received is £3,664 which is exactly the same amount owing if we continue to pay £229 over 16 months. HSBC advise that the interest is front bearing and we are now only paying the capital and no interest is refunded. Surprisingly they also advise the interest could have been pro rataed in the loan earlier but not at this stage.

The loan is regulated by the Consumer Credit Act.

I am totally confused as we are now at the stage of awaiting a final decision from HSBC before forwarding it to the Financial Ombudsman.

I am totally convinced HSBC really don't know their !!!! from their elbow.

If anyone can make light of this I would be eternally grateful and then perhaps they would explain it to HSBC!!!!!!

hackedoffatthem

well......

They have told you that the loan is front loaded with the interest which means you have paid off the interest and are now paying the actual loan. I guess they would have pro-rataed the interest before it was all paid if you settled in this time, but you didn't. So they can't.

I'm not sure i'm explaining it any differently than HSBC did but i tried!

CLAPTON

has the settlement figure been given to you in writing?

what does your original loan agreeement say about early settlement?

presumbaly your loan was about 11.9%?
after 44 payments you would expect a loan 'rebate ' of a couple of hundred pounds

although the interrest is NOT front loaded as such, obviously you pay more loan interest in the early months because you owe more
it all works exactly like a mortgage

Sjdbailey

The original loan agreement says the "simple rate" applied is 10.347% if that helps.

The agreement does say about early settlement but is not clear, but HSBC simply say the interest is not pro rataed.

The loan agreement in respect of settlement says:

If a quarter of the terms has passed - £8,805.17
If one half of the term has passed £6,304.40
If three quarters of the term has passed - £3,260.41

Any ideas anyone?

Clapton - I appreciate completely what your saying but surely even without the loan being front loaded (which is what HSBC advise has happened) the redemption figure should still be slightly different to the amount if paid in full; which it isn't - hope that makes sense.

CLAPTON

Sjdbailey wrote: »

The original loan agreement says the "simple rate" applied is 10.347% if that helps.

The agreement does say about early settlement but is not clear, but HSBC simply say the interest is not pro rataed.

The loan agreement in respect of settlement says:

If a quarter of the terms has passed - £8,805.17
If one half of the term has passed £6,304.40
If three quarters of the term has passed - £3,260.41

Any ideas anyone?

Clapton - I appreciate completely what your saying but surely even without the loan being front loaded (which is what HSBC advise has happened) the redemption figure should still be slightly different to the amount if paid in full; which it isn't - hope that makes sense.

is the settlement figure IN WRITING