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Lloyds early loan repayment penalties
nicolacerisa
Posts: 7 Forumite
in Loans
Hi all,
first post so please forgive me if this has been raised before.
I took out a Lloyds personal loan last year for £5K, I want to pay it off because the rate is high (over 20%). The amount outstanding on the account statement is £4200 but the settlement figure is £4400 because there is 58 days interest added as a penalty. Not happy about this!
The suggestion has been made to me that I pay about £4000 as an overpayment, and then let the direct debit payment go through for the next month, then settle it after that on the basis that the interest penalty payment is going to be negligible.
Is this true?
Many thanks!
first post so please forgive me if this has been raised before.
I took out a Lloyds personal loan last year for £5K, I want to pay it off because the rate is high (over 20%). The amount outstanding on the account statement is £4200 but the settlement figure is £4400 because there is 58 days interest added as a penalty. Not happy about this!
The suggestion has been made to me that I pay about £4000 as an overpayment, and then let the direct debit payment go through for the next month, then settle it after that on the basis that the interest penalty payment is going to be negligible.
Is this true?
Many thanks!
0
Comments
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nicolacerisa wrote: »the settlement figure is £4400 because there is 58 days interest added as a penalty. Not happy about this!
Why not? You would have known this when you took out the loan.then settle it after that on the basis that the interest penalty payment is going to be negligible.
Is this true?
Have you asked the loan provider?0 -
Firstly, I don't doubt that the penalty clause is in the terms and conditions - I'm aware that the CCA allows for such a penalty on a loan of less than 5 years. I hadn't appreciated it could amount to that significant a sum: it just feels a bit harsh that's all. £200 is a lot of money to me.
The bank are being cagey on the subject, which is perhaps not surprising.0 -
If they allow overpayments crack on with the second suggestion. Pay it all off apart from the single final payment.
They will never promote this option for obvious reasons but it doesn't mean you can't.
If you do this, don't go crazy and cancel the DD straight after, there may well be an adjustment of interest. Don't go risking a default for a couple of quid.0 -
nicolacerisa wrote: »=
The suggestion has been made to me that I pay about £4000 as an overpayment, and then let the direct debit payment go through for the next month, then settle it after that on the basis that the interest penalty payment is going to be negligible.
Is this true?
Yes, that is correct.0
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