Natwest personal loan -- have I overpaid?

rubuhoeikanaika

Hey all,

A few years ago I took out a Natwest personal loan (£2k, 5 years, ~17.7%, £50/month).

In my online banking, the loan showed up as personal loan, balance £-3k. I assume the extra £1k was for the expected interest, and a quick loan calculation agrees with me.

Over the years I have made a few overpayments in online banking -- not small ones either, a few of £300-400. But all that has happened is that the amount owed (what started as £3k) has gone down by the amount I overpaid.

But is this right? Surely the overpayments (hence, paying sooner) should have reduced the total amount of interest I have to pay, reducing my total owed from £3k to a fair amount less?

Should I write to natwest and have them look into this?

Thanks!
rubuhoe

Tupperware_Queen

does the loan agreement allow for overpayments? You may have been better to hoard the extra money and let it build up, then ask for a settlement figure when you think you have got about the right amount saved

rubuhoeikanaika

Tupperware_Queen wrote: »

does the loan agreement allow for overpayments? You may have been better to hoard the extra money and let it build up, then ask for a settlement figure when you think you have got about the right amount saved

I seem to remember that the loan agreement allowed for overpayments, but with an early repayment penalty. Loan agreement is elsewhere.

Didn't want to hoard because I could never get 17.7% on my savings -- though in retrospect that might have been the wrong call!

Edit: found this on their website:

You have the right to repay the credit early at any time in full or partially.

If you chose to repay the Loan early, either in full or in part then additional interest will be payable. This will be an amount equal to 58 days interest at the Annual Rate of Interest (28 days’ interest only if the original period of the loan is one year or less), calculated on a daily basis on (a) the amount by which the outstanding balance of the Loan is reduced by the overpayment or (b) where the Loan is repaid early, on the amount of the outstanding balance of the Loan which is repaid ahead of the due date.

Seems to suggest I should have come out ahead with overpayments, even after the interest penalty?

Tupperware_Queen

it might be worth giving them a call, maybe they can recalculate it for you